On-chain data shows that the Coinbase exchange has just experienced a massive Bitcoin outflow, suggesting that some large-scale buying may be taking place.
Over 16,000 BTC left the Coinbase platform in the past day
As one analyst pointed out in a CryptoQuant Quicktake post, Coinbase has experienced huge outflows for the seventh time this year. The on-chain metric of interest here is “exchange outflows,” which tracks the total amount of Bitcoin leaving wallets attached to centralized exchanges.
When the value of this indicator is high, it means that investors are currently withdrawing large amounts of funds from the relevant platform. Generally speaking, holders will withdraw their tokens from the custody of these central entities whenever they plan to hold their tokens for the long term.
Additionally, this trend may also indicate that these currencies were newly purchased, so exchange outflows may have an overall bullish impact on the cryptocurrency’s price.
On the other hand, a lower value for this metric could mean there is little interest in buying the asset at the moment. Depending on the trend of the opposite indicator (i.e. trade inflow), such a value could be bearish or neutral for the coin.
Now, the chart below shows Bitcoin trade outflow trends specifically for the Coinbase Advanced platform:
The value of the metric seems to have been quite high recently | Source: CryptoQuant
As the chart above shows, Coinbase has seen a huge spike in Bitcoin transaction outflows over the past day. A total of 16,021 BTC were leaked from the platform, worth nearly US$1 billion at the current exchange rate. Given the scale, a large entity must be involved.
Coinbase, in particular, is known to be the exchange of choice for US institutional investors, so this accumulation could come from such traders. A zoomed-in view of the same indicator chart shows that this is certainly not the first time such withdrawals have occurred on the platform.
Looks like the metric has registered several spikes over the past few months | Source: CryptoQuant
As highlighted by the quant in the chart, Coinbase has seen seven Bitcoin outflows of similar size in 2024 so far. Some of these purchases were made before prices spiked, so they may have been at least partially the instigators of these purchases.
However, the recent surge failed to have any bullish impact on the cryptocurrency, so it’s difficult to say whether the latest outflow will lead to any rebound.
“This transaction is likely to be institutional buying,” analysts noted. “But on the other hand, this could also be an internal transfer from Coinbase.”
Of course, if the latter was responsible for this apparent outflow, then the deal wouldn’t really be relevant to the market.
bitcoin price
Bitcoin has edged up 1% over the past 24 hours, taking its price back to $62,400.
The price of the coin appears to have been consolidating sideways recently | Source: BTCUSD on TradingView
Featured images via Unsplash.com, Dmytro Demidko at CryptoQuant.com, charts via TradingView.com
