Journalist
Posted:
- Exchange withdrawals for BTC eclipsed deposits over the past three months.
- Bitcoin trading volumes are muted for most of 2023.
Compared to previous months, August proved to be quite eventful for Bitcoin [BTC] while rallies and crashes once again became the norm. However, when zooming out, it became clear that the king coin was perhaps going through its quietest stage ever.
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Bitcoin is getting boring
An on-chain researcher took to social platform X to illustrate how Bitcoin’s supposed selling point – volatility – has plummeted compared to previous years. An accompanying chart in the post shows that the Bitcoin Volatility Index has fallen below 50 in recent months, compared to 150 and above during the peak of the 2021 bull market.
GM!
Take a moment to remind yourself.
You live in one of the most boring periods in the history of #Bitcoin.
But it won’t always be that way. pic.twitter.com/gA8me0i3aJ
— Emperor Osmo
(@Flowslikeosmo) September 2, 2023
One of the main factors behind the dull price action of the world’s largest digital asset has been the hoarding mentality of investors. More and more BTC holders transferred their assets to self-custody instead of trading them on crypto exchanges.
Prominent sleuth Ali Martinez stressed that currency withdrawals for BTC have eclipsed deposits over the past three months. According to Martinez, such a development was unprecedented.
Source: Ali with input from Glassnode
Aside from the pursuit of long-term benefits, declining investor confidence in currency transactions contributed to Bitcoin’s dwindling supply of liquid assets.
In recent months, US regulators have cracked down on some of the largest trading platforms such as Binance and Coinbase. As a result, the fear of losing access to their money in the event of an unexpected event drove people to put them into self-custody.
Trading activity declines in 2023
As can be seen, Bitcoin trading volumes have been muted for most of 2023, according to Token Terminal data. While developments around spot ETF applications caused some volatility in August, trading activity was still significantly below the March peak.
Source: Token terminal
However, an encouraging development that emerged in recent weeks was that BTC in particular, and the market in general, has become more responsive to crypto-specific events. Unlike previous years, when TradFi’s macroeconomic triggers affected crypto prices, the decoupling has increased somewhat.
How much is 1.10.100 BTC worth today?
Good times ahead?
At the time of writing, BTC exchanged hands $25,896.67 each CurrencyMarketCap. One popular technical analyst seemed confident that the current bear market would soon give way to a bull run.
#Bitcoin races to a realized loss on the 50-day moving average of the RPV ratio.
And if previous cycles tell us anything, this is the last time this will happen until the next cycle top!
Each cycle makes Bitcoin a… pic.twitter.com/Rrw7wYKbvA
— CryptoCon (@CryptoCon_) September 1, 2023