Total Bitcoin inflows to exchanges are net negative since July 2021

While Bitcoin inflows to all exchanges have been net negative since last July, the four major exchanges have bucked this trend and are almost all positive.

Since last July, all cryptocurrency exchanges have seen a combined net outflow of 46,000 bitcoins (worth about $1.8 billion at current prices).

Only Binance, Bittrex, Bitfinex, and FTX saw net inflows of 207,000 bitcoin (BTC), according to data from blockchain analytics firm Glassnode’s March 7 newsletter. During the same period, all other tracked exchanges had a total net outflow of 253,000 BTC.

FTX and Huobi have experienced the biggest changes in their BTC holdings since last July. While the number of BTC held by FTX has more than tripled to 103,200 today, Huobi’s holdings have shrunk from over 400,000 BTC in March 2020 to just 12,300.

Net outflows have remained steady since last year, with several large spikes in August and most recently on January 11.

However, Glassnode attributes the current relatively low inflows to “the current scale of market uncertainty,” noting that the cryptocurrency trading market has generally turned to derivatives trading rather than spot trading in order to hedge risks.

Measure exchange inflows to help better understand whether investors are ready to liquidate or hold their tokens. Net inflows represent imminent selling pressure, while net outflows indicate more holding.

Bitcoins still on-chain maintain a realized price of $24,100 per Bitcoin, suggesting a 63% profit margin for most Bitcoin holders. The realized price is the average price of all coins as they move on-chain.

Realized price contrasts with implied price of $39,200. The implied price, which is a fair value estimate per coin, is currently slightly below breakeven, as BTC is trading at $38,346 at the time of writing, according to data from CoinGecko.

Currently, short-term holders have lost about 15% of their asset value as the average price of tokens moving on-chain over the past 155 days is $46,400, according to Glassnode.

In addition to low inflows and outflows, sellers' profit-to-loss (PnL) ratios have flattened notably since early 2021. Glassnode said that long-term holders (LTH) are getting weary of selling, although “we haven’t seen the massive LTH sell-offs seen at the last cyclical bottom.” It added:

“Historically low STH and LTH losses may indicate a growing likelihood of overall seller exhaustion.”

The newsletter warns that there remains a risk of "final and complete abandonment by STH and LTH", which has been seen at previous cycle bottoms.