The data shows that despite the decline in crypto experience, exchanges have abandoned bitcoin exchanges in large numbers so far in the year 2022.
Bitcoin Netflow across all exchanges has been negative in recent months
According to the latest weekly report from Arcane Research, BTC saw the biggest outflow in June since November last year.
“Exchange netflow” is an indicator that measures the net amount of bitcoins going into or out of wallets of all exchanges. The value of the metric is calculated by taking the difference between inflow and outflow only.
When the value of this indicator is negative, it means that a net number of coins are just leaving the centralized exchange wallet. Such a trend, in the long run, could prove bullish for the price of the crypto as it could be a sign of accumulation from investors.
On the other hand, holders of metric values greater than zero are currently depositing a net amount of BTC to exchanges. If these inflows are for selling purposes, the trend may have a bearish effect on the value of the coin.
Now, here is a chart that shows the trend so far in bitcoin exchange NetFlow for each month of the year:
The value of the metric seems to have been quite negative recently | Source: Arcane Research's The Weekly Update - Week 33, 2022
As you can see in the graph above, exchanges saw a decent amount of net bitcoin outflows during the period from January to April, but the trend flipped in May.
May saw a large number of coins entering the exchange wallet, but these inflows did not last very long. The LUNA crash that occurred later that month caused many of the biggest lenders and exchanges in the crypto market to collapse.
These platforms freezing withdrawals created panic in the market and the awareness of crypto custody continued to grow stronger. 119k BTC left exchanges in June, the largest amount since November 2020.
The months of July and August have so far continued with this trend, seeing significantly larger net outflows (though not as large as June).
The report said that the latest bitcoin outflow shows that there is now less trust among crypto holders around centralized lenders and exchanges.
btc price
At the time of writing, the price of bitcoin is down 8% over the past seven days, around $21.6k.
Looks like the value of the crypto has been mostly moving sideways in recent days | Source: BTCUSD on TradingView
Featured image from André François McKenzie on Unsplash.com, charts from TradingView.com, Arcane Research