Major cryptocurrency exchanges experienced a significant net outflow on October 24th as the price of Bitcoin (BTC) briefly reached the $35,000 mark for the first time in a year. This movement of funds away from exchanges is viewed as a bullish sign, indicating that traders are moving their assets to secure storage in anticipation of price increases.
According to data provided by crypto analytic firm CoinGlass, Binance recorded the largest outflow, with over $500 million transferred off the exchange in the past 24 hours. Crypto.com followed with $49.4 million in outflows, while OKX recorded $31 million. Most other exchanges recorded less than $20 million in outflows.
There have been concerns about a potential “bank run” after the collapse of FTX in November 2022, but the recent outflows are more aligned with trader sentiment than fear-induced withdrawals during the peak bear market. Glassnode data confirms that Bitcoin outflows from exchanges have increased in line with BTC’s price surge in the past few days.
The price surge also led to approximately $400 million worth of short positions being liquidated. Over the last 24 hours, 94,755 traders experienced the liquidation of their derivative positions. The largest single liquidation order occurred on Binance, amounting to $9.98 million.
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On-chain analysts have also pointed to the market value to realized value (MVRV) ratio as a significant indicator. This metric compares a cryptocurrency’s market value to its realized value, calculated by dividing its market capitalization by its realized capitalization. The current MVRV ratio stands at 1.47, while during the last bull run it reached 1.5.
The increase in Bitcoin’s price also led to wallets in profits reaching 79.72%. According to the Twitter account hitesh.eth (@hmalviya9), the bull market officially starts when the MV ratio stays above 1.5. As the ratio currently sits at 1.47, hitesh.eth is optimistic about Bitcoin reaching $40,000 in the next few days, which would push the MV ratio to 1.6.
The total market capitalization of the cryptocurrency market has risen by over 7.3% in the last 24 hours, reaching a valuation of $1.25 trillion. This is its highest valuation since April. The surge is believed to be driven by speculation surrounding the launch of a spot Bitcoin exchange-traded fund (ETF).
In summary, major crypto exchanges experienced a net outflow as the price of Bitcoin climbed to $35,000. This movement of funds away from exchanges is seen as a bullish sign, indicating traders’ confidence in the price increase. The liquidation of short positions and the rise in the MVRV ratio further support the positive market sentiment. Additionally, the cryptocurrency market’s total market capitalization reached its highest valuation in several months, driven by speculation about a Bitcoin ETF launch.
