According to a data platform glassnode, 20,952 Bitcoins were withdrawn from crypto exchange Binance after Bitcoin BTC/USD’s price fell under $52,000 on Sunday.
What Happened: Some on-chain analysts suggested that this could have been a large whale moving coins off the market. However, a transaction of this size could have also been an internal transfer on Binance.
Why It Matters: Although the nature of this transaction has not been confirmed, coins moving off exchanges typically indicates a reduction in the supply available for trading.
Sometimes, large Bitcoin holders use the price slump as an opportunity to purchase Bitcoin and move it off exchanges to be stored offline.
At the end of 2020, analysts from glassnode had determined that 14.5 million Bitcoins could be classified as “illiquid,” while only 4.2 million Bitcoins were publicly available on exchanges for buying and selling.
See also: eToro vs. Binance
“Over the course of 2020, a total of 1 million additional BTC have become illiquid – investors are increasingly hodling,” said the analysts, adding that this is a bullish factor suggesting "that the current bull run has been (partly) driven by this emerging Bitcoin liquidity crisis.”
Price Action: Bitcoin was down over 5% at the time of writing, trading at $55,950.
A number of other cryptocurrencies were also down overnight, with some recording losses in excess of 15%.
Amidst a market-wide selloff, Dogecoin DOGE/USD was the only cryptocurrency that gained 18.55% in the past 24-hours.
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