New data from crypto analytics platform Glassnode highlights that the total number of Bitcoin accumulation addresses is on track to establish a new high of 800,000. In particular, the number of BTC accumulation addresses surged to 793,591 on Christmas day.
In August, Glassnode reported that Bitcoin reached an all-time high of 700,000 accumulation addresses and it appears that the world’s largest cryptocurrency will break its own record.
Furthermore, on-chain data also indicates a significant increase in the total BTC balance of those addresses.
Increasing Accumulation Addresses
An accumulation address is, “addresses that have at least 2 incoming non-dust transfers and have never spent funds,” according to Glassnode’s definition. The possibility of the metric reaching a new all-time high suggests that investors are accumulating more Bitcoin and holding a strong belief in the rally future
However, it is worth noting that the total number does not include exchange wallets, miners’ wallets, and over-7-month inactive addresses. Glassnode explains the potential losses of funds and the fact that lots of Bitcoin weren’t in circulation could wrongly affect the calculation.
As data highlighted, as of Dec. 25, there is a total of 3,099,828 BTC held in accumulation addresses, coming close to the highest level of 3,403,280 BTC in August 2015.
Bitcoin accumulation is quite solid at this stage despite the great distance to the price peak in Novemeber 2021. Bitcoin is trading at around $16,500 at the time of writing.
Declining Outflows
Additional Glassnode’s on-chain data indicates that the worrying tendency of BTC withdrawals shows signs of cooling off. Bitcoin exchange outflows have finally dropped to their 7-month low after a series of incidents that triggered “bank runs.”
The record was set on November 14 when investors withdrew 142,788 BTC from cryptocurrency exchanges in the aftermath of the FTX fiasco.
During November, investors made massive withdrawals from CEXs including Binance and Coinbase, the two largest trading platforms after their exchange peer collapsed.
Cryptocurrency exchange FTX filed for bankruptcy protection in mid-November after failing to repay customers about $8 billion. On December 12, FTX founder Sam Bankman-Fried was also arrested in the Bahamas and extradited to the US to face his charges of fraud and money laundering.
The exchange is estimated to have over 1 million creditors. That explains why the FTX fall prompted fear for investors holding assets on other centralized cryptocurrency exchanges, leading to huge asset withdrawals.
According to the latest data from Nansen, investors withdrew $1.9 billion from the Binance exchange within 24 hours of learning that Sam Bankman-Fried had been arrested in the Bahamas. This is the highest 24-hour cash outflow on this exchange since June 13th.
As a result, the world’s largest cryptocurrency exchange had to temporarily suspend USDC stablecoin withdrawals. Binance recently faced a surge in outflows as a result of escalating negative headlines about the company.
Bear Market Bottom?
It’s unexpected that the substantial surge shifted since negative news kept coming in. As of December 25, data showed that overall outflows across crypto exchanges had plummeted by more than 93%, with only 9,352 BTC leaving the exchanges.
The latest cryptocurrency crisis appears to have dampened investor enthusiasm in Bitcoin, pushing them to withdraw their cash in order to avoid hazardous investments.
However, now that the storm has passed, many people see it as an opportunity to buy the dip. Given that Bitcoin was previously expensive, the price decline is likely to provide a chance for new investors to join the network.
Buying at a bargain level has grown as a popular investing strategy over the years, particularly for investors seeking long-term gains. The addition of new accumulation addresses, combined with declining withdrawals, generally signals bullish indicators, and investors choose to own Bitcoin in the hope of a future rebound.
