Bullish Market Signals as Major Crypto Exchanges See Significant Outflows Amid Bitcoin Surge
Summary:
On October 24, significant crypto exchanges experienced a substantial outflow as Bitcoin almost hit the $35,000 mark. The mass withdrawal, largely from Binance, reportedly signals bullish market sentiment. The recent price surge triggered the liquidation of short positions worth millions. On-chain analysts used the MVRV ratio to indicate a near bull run. Additionally, the total crypto market cap rose 7.3% in 24 hours, believed to be due to anticipated Bitcoin exchange-traded fund speculation.
The 24th of October saw a noteworthy outflow from prominent cryptocurrency exchanges when Bitcoin flirted with the $35,000 price point for the first time in twelve months. This trend of daily withdrawals is typically a bullish signal, as investors transfer their holdings off these platforms, foreseeing a potential uptick in prices. Coinglass, a crypto analytics entity, revealed that Binance had the largest withdrawal of over $500 million in the preceding day, trailed by crypto.com and OKX with outflows of $49.4 million and $31 million respectively. Other exchanges hit less than $20 million in withdrawals.
The elevated rate of exits from crypto platforms has triggered anxiety of a possible "bank run", especially in light of the FTX collapse last November. Nevertheless, the current outflows seem more aligned with prevailing market sentiment rather than fear-based withdrawals seen in severe bearish markets. Glassnode's review corroborates the upward trend in Bitcoin withdrawals from exchanges in recent days, with prices simultaneously skyrocketing.
As the price escalated, it triggered the liquidation of short positions worth several million dollars, and total liquidations hit the $400 million mark. In the past day, derivative positions of 94,755 traders were liquidated, with the largest single order, valued at $9.98 million, occurring on Binance.
On-chain analysts also referred to the Market Value to Realised Value (MVRV) ratio, a measure comparing an asset's market value and its realized value. It's calculated by taking the cryptocurrency's market cap and dividing it by its realized cap. The realized price is gauged by the mean price of each coin or token when last transferred on-chain. Currently, the MVRV ratio stands at 1.47. The previous bull run saw the ratio at 1.5.
The total cryptocurrency market capitalization experienced a 7.3% increase in the last 24 hours, reaching the $1.25 trillion mark, the loftiest since April this year. The swelling was ascribed to increased speculation regarding the introduction of a spot Bitcoin exchange-traded fund.
Published At
10/24/2023 10:02:50 AM
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