Lowest Exchange BTC Balances Since 2019 — Calm Waters Ahead?

Bitcoin (BTC) balances of the major exchanges are at their lowest point since 2019.

Calm waters ahead?

From a high in mid-January, the number of Bitcoins on deposit at major exchanges has dropped significantly in following months. This trend accelerated after the recent market collapse.

Source: Glassnode

Further supporting this trend is the “exchange net inflow” data, which is derived by subtracting Bitcoins leaving exchanges from Bitcoin moving into exchanges. The net inflows have been negative for much of 2019 with a short positive spike around the most recent meltdown.

Source: Glassnode

This could imply that market participants are not expecting a major price move in the near future and have withdrawn their Bitcoin from exchanges for better safekeeping.

Trading patterns are back to normal

During the recent selloff, the bid-ask spread increased exponentially, indicating the disbalance in the supply and demand of bitcoins at the time. However, it has returned to more normal ranges since. This is another indicator of a return to normality.

Source: Kaiko

Furthermore, the same trend can be observed with Bitcoin trading volume. After a brief and sharp spike during the latest downturn, it has since returned to normal ranges.

Source: Kaiko

It seems like the market is going through a consolidation phase in anticipation of the upcoming Bitcoin halving, which may have a significant impact on the market dynamics.