No, Bitcoin withdrawals from exchanges are not inherently bullish for crypto.

Traders say record number of BTC held on exchanges is a bullish signal, but data suggests otherwise.

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Crypto analysts on X (the social media platform formerly known as Twitter) and in YouTube interviews have been abuzz talking about the trend of Bitcoin leaving centralized exchanges.

On August 29, the amount of Bitcoin (BTC) held on exchanges saw a decline, reaching its lowest point since January 2018. Although various factors could be behind this move, experts analyzing blockchain data often interprets this change as a positive indicator. . Traders are now wondering what may have caused Bitcoin's inability to break above $31,000, as this price action does not align with their view that fewer coins on exchanges is bullish for the price of BTC. /p>

The perspective on the decline of Bitcoin held on centralized exchanges stems from the idea that when traders withdraw their coins, it signals bullish sentiment. This is usually associated with a strategy of keeping the assets in safekeeping for the long term.

Although these assumptions lack conclusive evidence, their persistence likely stems from historical precedent. However, establishing a relationship between these events and a specific cause remains difficult to establish, regardless of the frequency of such events. While purchasing on exchanges may require a prior deposit in fiat currency, the reverse is not necessarily true.

Data Fails to Show Correlation Between On-Chain Metrics and Bitcoin Price Action

Blockchain transaction data shows a steady reduction in bitcoin deposits on exchanges since mid-May. Meanwhile, Bitcoin's price trajectory fails to offer substantial indications of a bullish recovery, except for a brief rise in mid-June that coincided with BlackRock's submission of a fund request. traded on the cash exchange.

Change in exchange net position global bitcoin, in BTC . Source: Glassnode...