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Bitcoin exiting centralized exchanges in a similar setup to mid 2016, we all know what happened next... by jrcornel

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hive-167922 · @jrcornel ·
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Bitcoin exiting centralized exchanges in a similar setup to mid 2016, we all know what happened next...
# There is a very interesting pattern taking place as it relates to Exchanges that we saw at least once before...

The number of bitcoin sitting on exchanges has been declining as of late, which is rather interesting considering it had been increasing for years.

Before I get into the reasons for this, lets look at the most recent previous example.

Back in mid 2016 we had a similar setup where coins on exchanges were increasing for years, then in mid 2016, around the time of the halving, coins started leaving exchanges...

Check it out:

![image.png](https://images.hive.blog/DQmRrbVhrTCUjMzzcxQ3MhBt9Zar2rC8M8RH3AWLXaBKRJJ/image.png)

(Source: https://twitter.com/woonomic/status/1313798073995325440/photo/1)

Pay special attention to that first green arrow above.

This is just American Exchanges but you can clearly see a pattern of bitcoin sitting on exchanges dropping from mid 2016 to mid 2017, before spiking sharply towards the end of 2017 and beyond.

If you look on the far right side of the chart you can see a similar pattern starting to emerge there as well, interestingly enough, also right around the time of its most recent halving.

# Why is this happening?

There are several possible explanations as to why this is happening...

The first one being defi.

People have been pulling bitcoin off of exchanges and parking them in defi for a couple months now.

Currently there is almost 100k bitcoin wrapped on ethereum at this point:

![image.png](https://images.hive.blog/DQmUrkdmxZA7fkYwyimTxq62G4ATDH8UvDHWBgWiQU6KBB6/image.png)

(Source: https://twitter.com/glassnode/status/1313852064720736256/photo/1)

There is also the rise of the dex that sort of goes along with this that is likely playing a role as well.

People don't necessarily need to go to a centralized exchange in order to swap their currency for another.

# The end result is all that matters...

The final possibility is most likely what happened back in 2016 and that relates to miners and whoever else is responsible for pushing the price around.

Pulling coins off of exchanges may be part of an elaborate plan to pump the price, or it may just be coincidence as it relates to halving events.

Either way, with not much available supply it becomes that much easier for the price to go higher.

That is probably what happened back in mid 2016 and seems to happen right around the time of the halvings just as it is now.

There is no guarantee that the current setup will resolve in a similar fashion as the one back in 2016 (with the price of bitcoin exploding higher), but the fact that the coins are moving off the exchange is really all that matters.

There will be less available supply to counterbalance a sudden surge in demand.

Which means, the end result is the same...

A surging bitcoin price and people left scratching their heads why they didn't see it coming...

You did.

Stay informed my friends.

-Doc

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vote details (254)
@nealmcspadden · 
This makes a lot of sense. The less liquidity there is available on exchanges, the more volatile the price can be.

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@jrcornel · 
Yep exactly. I am not sure exactly why it happened back in 2016 but it likely played a role in the price being able to ascend so sharply. Perhaps with a similar setup now we can see another sharp move higher in the coming months.
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@onealfa.leo · 
The history never repeats. But it tends to rime. 😄

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@jrcornel · 
Yes it most certainly does. We may not see a 20x price rise from here like we did back in 2016, but 5x-10x certainly may be possible in a short amount of time. :)
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@smallearth · 
Can you see how the exchanges are holding the BTC,hot / cold wallet, custodial services.
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@stefano.massari · 
Thanks for sharing
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