Bitcoin Self-Custody Grows as Withdrawals Outpace Deposits

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• Bitcoin transactions have recently surpassed a two-year high, indicating the market is gearing up for a bull run.
• Exchange deposits have historically dominated withdrawals but in September 2022, more Bitcoins were withdrawn than deposited.
• This bullish metric shows investors are planning to hodl their coins rather than trade them.

Bitcoin Transactions Reaching Two-Year High

The number of Bitcoin (BTC) transactions has recently hit a two-year high indicating the market is gearing up for a bull run. Data analyzed by CryptoSlate shows that total number of Bitcoin transactions surpassed 307,000 in February 2023 and previous transaction number peaks correlated with Bitcoin’s price rallies.

Exchange Deposits Historically Dominating Withdrawals

Exchange-related deposits and withdrawals of Bitcoin give us an insight into market sentiment. When the number of exchange deposits grows, it indicates the liquid supply of Bitcoin grows and shows the market’s readiness to trade. Conversely, when the number of exchange withdrawals increases, investors seem less interested in trading and are looking to hold their BTC off exchanges. Since 2014, this trend was for exchange deposits to outpace withdrawals but this changed in September 2022 when more Bitcoins were withdrawn than deposited – 53,000 BTC withdrawn compared to 52,000 depositied during this month.

Bitcoin Rally Fueled By Derivatives

The previous transaction peak recorded in early 2021 followed the same pattern but this time around the price began rising even after transaction numbers peaked which indicated that the bull run experienced throughout last year was fueled by derivatives rather than on-chain activity.

Investors Planning To Hodl

This bullish metric shows investors are planning to hodl their coins rather than trade them which suggests they are accumulating crypto assets with long term goals rather than just profit from short term trades.

Self Custody Growing

Self-custody continues to grow as more people move away from exchanges into holding onto their own private keys on custodial wallets or other methods such as hardware wallets or paper wallets which further supports this thesis that investors are looking closer at long term investment strategies with cryptocurrency investments .

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