CryptoQuant CEO Says Coinbase Bitcoin Outflows Signs of Bullishness

CryptoQuant CEO Says Coinbase Bitcoin Outflows Signs of Bullishness


Large Bitcoin outflows from Coinbase indicates a healthy sign for the leading cryptocurrency and a possible rally on the cards, according to CryptoQuant CEO Ki Young Ju. Data from crypto analysis firm CryptoQuant have showed that more than 15,200 BTC worth over $515 million were withdrawn from Coinbase on Jan. 31. Based on several factors, Ju believes this is likely part of the over-the-counter (OTC) transactions from institutional investors.

CryptoQuant CEO Believes Coinbase Bitcoin Outflows Are from Institutional Investors

The CryptoQuant CEO believes the large Bitcoin outflows from Coinbase are from the OTC transactions from institutional investors. Ju pointed the reason for this is due to the split of a 15,000 BTC wallet into wallets containing 1,000-5,000 BTC increases only security costs.

Besides, most of the internal transfers are done with round amounts, like 1,000 to 5,000 Bitcoin, Meanwhile, the transfer included odd groupings of 1,265, 2,391, and 1,957 BTC. Splitting bigger wallets into smaller wallets increases security, but also raises security costs involved.

Why assuming OTC:
1/ No reason to split a 15k wallet into 1-5k wallets. It increases security costs.
2/ The number looks weird like 1265, 2391, 1957. Most internal transfers are like 1k, 5k, 10k.
3/ Coinbase Custody is integrated with OTC desks.

— Ki Young Ju 주기영 (@ki_young_ju) February 1, 2021

He believes the outflows indicate OTC deals, saying:

“Since the price is eventually determined on exchanges, massive non-exchange transaction volume is considered as a bullish signal. These transactions include OTC deals.”

Investors Bought the Bitcoin Dip

The CryptoQuant CEO sees the Coinbase outflows as a bullish sign for the cryptocurrency market as it indicates investors are moving their tokens to storage. If investors are moving significant amounts of Bitcoin to storages, it means investors are seeing the cryptocurrency as worthwhile to hold rather than sell on exchanges. With Bitcoin in cold wallets, the token won’t be traded or exchanged.

There have been various speculations on Bitcoin’s price dropping from $42,000 to below $30,000 as a sign of the bear market. However, the purchase of 4,000 BTC on Feb.1 indicates that institutions have seen this as an opportunity to buy the dip and that have full optimism on the leading cryptocurrency.

Here are the transaction links. Someone bought 4,400 BTC today…

— Ki Young Ju 주기영 (@ki_young_ju) February 1, 2021

Source link

Latest Crypto News

Popular Links

Notify of
Inline Feedbacks
View all comments