Bitcoin Traders Keep Buying the Dip, Blockchain Data Suggests

Bitcoin buyers may have bought the recent price dip and now are taking down their cryptocurrency from exchanges, blockchain data suggests. To digital-market analysts, it's a bullish signal traders or investors might be preparing to hold their BTC for the long term.

• More than 1,365 BTCs were removed from cryptocurrency exchanges during the 24 hours through 12:00 UTC Thursday, the highest for a 24-hour period so far this year, according to the blockchain data firm Glassnode.
• The spike in withdrawals from exchange addresses came as the No. 1 cryptocurrency by market capitalization slumped on Thursday to near $50,000, from a high at $56,783.86 in the past 24 hours.
• "Today we have a new all-time high in BTC leaving the exchanges for 2021 and a new dip-buying prize to award," bitcoin analyst Willy Woo tweeted Thursday.

• At the same time, more coins are being withdrawn to an illiquid status, separate blockchain data show.
• The monthly net change of supply held by liquid and highly liquid entities have pushed into deeply negative levels, to a degree not seen in three years, according to Glassnode. (See chart above.)
• That might be related to many investors' growing use of bitcoin as a hedge against inflation in the face of trillions of dollars of monetary stimulus pumped into global financial markets over the past year by central banks around the world.
• "The trend of coins withdrawn and locked away into long-term holding patterns is a direct response to the world's central bank response to 2020," Glassnode wrote in its newsletter earlier this month. "There still appears to be significant demand from long-term investors."
• At press time, bitcoin is changing hands at $51,278.06, down 9.49% in the past 24 hours.