On-chain data shows that bitcoin could be experiencing a liquidity crisis, despite the recent correction where it lost 20% in just one week. Exchanges have seen 23,000 coins stolen in just three days. This is more than $1.3 million.
$3.35B in BTC Withdrawn from Exchanges in Three Days
Ali Martinez, a crypto analyst, cited data from Blockchain Analytics company Glassnode to describe the recent enhanced bitcoin withdrawals from digital assets trading platforms.
On-chain data revealed that withdrawals have seen a significant increase in the last few days, regardless of the bitcoin price drop. Over 23,000 coins were removed from exchanges.
Bitcoin Sitting on Exchanges. Source: Glassnode
This was in line with reports that one of the biggest BTC whales had recommenced their buying spree and accumulated more than $200 million of the asset within days.
Although the total amount taken from exchanges is significantly higher than that of this whales’ purchase, it could be that some withdrawals were internal transfers.
It does not mean that there are fewer bitcoins on trading platforms than in previous days. This should decrease the selling pressure.
Bitcoin Investors Make Profit
The primary cryptocurrency suffered a huge correction from its peak of $69,000 at the beginning of last week. The asset lost 20% in a matter of ten days and fell below $56,000 today.
This has, somewhat unexpectedly, harmed investors as well as their positions. Additional data from the analytics firm revealed that more than 17% of total BTC supply was “underwater,” which means that only 83% of it is still in profit.
A large sell-off in the #Bitcoin Market indicates that there is a significant change in the profitable supply. This tells you how many coins have an average on-chain cost basis higher than the current price.
Over 17% of $BTC supply has been lost since the ATH. This leaves 83% profit.
— glassnode (@glassnode), November 19, 2021
However, this has not stopped long-term holders (LTHs) from holding their coins for a long time. Glassnode stated that these investors are not in a panic to sell their coins.
“LTHs, after peaking at 13.5M BTC in the last month, have only distributed 100,000 BTC during that time, which is 0.7% of their total holdings.”
According to Glassnode, 78.7% of LTHs are currently in profit. This is a slight decrease from the overall picture. Glassnode stated that the majority of purchases made at the price top were from short-term holders and that they are now in unrealized losses.
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