According to blockchain analytics startup CryptoQuant, approximately 14,666 Bitcoin, worth roughly $800 million were withdrawn from Coinbase exchange’s institution-focused unit, Coinbase Pro in a series of small transactions. Analysts are speculating the move to be an internal transfer or a large investor putting the coins into a private wallet.
Coinbase $800 Million Outflows Bullish for Bitcoin
Coinbase’s cold wallets for custody are directly integrated within the exchange’s over-the-counter (OTC) desk.
Usually, institutional players or large investors trade via the OTC desks to prevent influencing the market price heavily. Therefore, withdrawal from Coinbase Pro generally indicates institutional demand for Bitcoin.
Ki-Young Ju, CEO of CryptoQuant, remarked on the large Coinbase outflow:
“The outflow was split into multiple wallets, which could be their hot wallets, representing an internal transfer or custodian wallets for institutions. I think it’s likely to be a custodian wallet, which might indicate institutions are still buying the dip.”
Ju believes that the transfer was likely to be to a Coinbase Custody wallet, adding it was more of a speculative guess.
On-chain analyst Willy Woo says that data from on-chain market intelligence startup Glassnode indicates that “seriously strong long term holders are buying this dip.”
Anyone selling right now is cray cray. Seriously strong long term holders are buying this dip. pic.twitter.com/wVhfMOHaDl
— Willy Woo (@woonomic) March 23, 2021
Meanwhile, the crypto community is rejoicing that it’s a bullish signal for Bitcoin.
Bullish Signal. Big BTC outflow from Coinbase Pro 14,666 BTC (green circle). Remember this takes some hours/days to hit the market
— EL CRYPTO TAVO (@elcryptotavo) March 23, 2021
The bullish reaction comes due to Bitcoin’s previous price pullbacks resulting in price highs following outflows from Coinbase Pro. One can only wonder if history is going to repeat itself.
Bitcoin Falls to Its Lowest Level in Two Weeks
On March 24, Bitcoin (BTC) fell to its lowest level in two weeks. The cryptocurrency is currently trading around $54,156, down 6.16% in the past 24-hour but up 92.11% in the year-to-date (YTD) period.
Bitcoin had a strong start to the month, gaining 43% in the just two weeks of trading. The current week saw low trading volumes and decreased exchange inflows.
According to blockchain analytics company Glassnode, there were less than 2.44 million BTC available on exchanges as of March 21, the lowest since August 2018. The recent dip was the latest blow to the 2021 bull run of this month.