Crypto Outflows Boost Market

On October 24, major cryptocurrency exchanges experienced a significant outflow of assets, coinciding with Bitcoin's price briefly touching the $35,000 mark, a level not seen in a year. This movement of funds away from exchanges is seen as a positive indicator, suggesting that traders are taking their assets off exchanges to safeguard them in anticipation of rising prices.

According to data provided by the crypto analytics firm CoinGlass, the exchange with the largest outflow was Binance, which witnessed more than $500 million being withdrawn in the past 24 hours. Crypto.com and OKX also recorded substantial outflows of $49.4 million and $31 million, respectively, while most other exchanges reported outflows of less than $20 million.

Recent outflows from crypto platforms had raised concerns reminiscent of a "bank run" following the FTX collapse in November 2022. However, the recent outflows appear to reflect trader sentiment rather than panic-induced withdrawals during a bear market peak. Glassnode's data further supports this, indicating that Bitcoin outflows from exchanges have increased in line with the surge in BTC's price.

Bitcoin exchange outflows. Source: Glassnode 

This price surge also resulted in the liquidation of approximately $400 million worth of short positions, affecting 94,755 traders within the last 24 hours. The largest individual liquidation order occurred on Binance, amounting to $9.98 million.

On-chain analysts have drawn attention to the Market Value to Realized Value (MVRV) ratio, a metric that compares a cryptocurrency's market value to its realized value. This ratio is calculated by dividing a cryptocurrency's market capitalization by its realized capitalization. The current MVRV ratio stands at 1.47, with the last bull run featuring a ratio of 1.5.

#Bitcoin hit $35K. Wallets in profits hit 79.72%.

The Bull Market starts when the MV Ratio stays above 1.5.

We're now at 1.47. I'm positive about #bitcoin hitting $40K in the next few days, which will send the MV ratio to 1.6. pic.twitter.com/uCgdNLGRnq

— hitesh.eth (@hmalviya9) October 24, 2023

In the past 24 hours, the total cryptocurrency market capitalization has surged by over 7.3% to reach $1.25 trillion, marking its highest valuation since April. This surge is believed to be driven by increased speculation surrounding the imminent launch of a spot Bitcoin exchange-traded fund.

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