According to a data platform glassnode, 20,952 Bitcoins were withdrawn from crypto exchange Binance after Bitcoin (CRYPTO: BTC)’s price fell under $52,000 on Sunday.
What Happened: Some on-chain analysts suggested that this could have been a large whale moving coins off the market. However, a transaction of this size could have also been an internal transfer on Binance.
20,952 #Bitcoin withdrawn in 10 minutes from Binance after the crash.
Binancians, can we have an official comment on the nature of this spike? pic.twitter.com/FmBtsyxJOe
— Lex Moskovski (@mskvsk) April 19, 2021
Why It Matters: Although the nature of this transaction has not been confirmed, coins moving off exchanges typically indicates a reduction in the supply available for trading.
Sometimes, large Bitcoin holders use the price slump as an opportunity to purchase Bitcoin and move it off exchanges to be stored offline.
At the end of 2020, analysts from glassnode had determined that 14.5 million Bitcoins could be classified as “illiquid,” while only 4.2 million Bitcoins were publicly available on exchanges for buying and selling.
“Over the course of 2020, a total of 1 million additional BTC have become illiquid – investors are increasingly hodling,” said the analysts, adding that this is a bullish factor suggesting “that the current bull run has been (partly) driven by this emerging Bitcoin liquidity crisis.”
78% of the circulating #Bitcoin supply is illiquid and therefore hardly accessible for buying.
This points to a bullish investor sentiment as large amounts of $BTC are being hoarded – which reduces sell pressure.
Full report: https://t.co/nohmLNNJ7U
Highlights below 👇
— glassnode (@glassnode) December 29, 2020
Price Action: Bitcoin was down over 5% at the time of writing, trading at $55,950.
A number of other cryptocurrencies were also down overnight, with some recording losses in excess of 15%.
Amidst a market-wide selloff, Dogecoin (CRYPTO: DOGE) was the only cryptocurrency that gained 18.55% in the past 24-hours.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights