Bitcoin looks to stage recovery as exchange withdrawals decline
Bitcoin (BTC) is looking to recover from the latest downtrend that has seen it decline by over 7% in four days. The asset’s recovery charge comes on the back of the observable decline in exchange withdrawals.
Notably, the proliferation of inscriptions and BRC-20 tokens on the Bitcoin network led to massive and unforeseen congestion on the web, resulting in noticeably higher fees on the chain. As previously reported by crypto.news, Binance had to suspend a cluster of BTC withdrawals on its platform, citing the fee surge.
However, CryptoQuant data suggested that the decision could have been triggered by increased BTC withdrawals on Binance. Data indicates that Binance saw massive outflows to the tune of 175,650 BTC tokens on May 7, the day it had to pause BTC withdrawals. Binance later clarified that the observed outflows were BTC movements between its hot and cold wallets.
Moreover, data from the CryptoQuant BTC Exchange Netflow indicator shows exchanges have witnessed massive BTC net flows since May 2. From May 2 to May 9, net flows have been negative in six days and positive in only two days, resulting in a total of -38,865 BTC in net flows since May 2.
However, these outflows could actually be declining, as Glassnode data suggests that the number of BTC withdrawals from exchanges has dropped to a one-month low of 2,260.161.
Amid this drop, bitcoin is looking to recoup the losses incurred in the past four days. For the first time in two months, the asset has printed four consecutive losing candles on the daily timeframe. BTC sought to break this losing streak in a surge to $27,849, but the asset faced resistance at the zone.
Bitcoin is again seeking to recover, changing hands at $27,587 at the time of reporting, with a meager 0.07% increase in the past 24 hours. The asset must tower over the region between $27,000 and $28,500 if it wants to sit comfortably.