Blockchain analysis firm Glassnode's Bitcoin exchange net position change metric showed that Bitcoin (BTC) stored in wallets connected to centralized cryptocurrency exchanges has increased rapidly since May.
The Number of Bitcoins Held in Exchange Wallets is Rising Rapidly
Bitcoin gained 7% this month, extending its 28% rise in October.
Compared to the same date four weeks ago, the number of BTC held in exchange wallets rose to 31,382.43 BTC ($1.16 billion) on Sunday, the highest level since May 11, 2023. This increased the total balance held on exchanges to 2.35 million BTC.
Entry into exchange wallets commonly represents investors' intention to liquidate their assets, a potential selling pressure, or the intention to use coins as margin in the futures and options markets.
BTC exchange net position change has been consistently positive since November 1. Historically, such periods have coincided with periods when the bull market took a breather or prices pulled back.
However, the latest entry may also indicate renewed investor confidence in centralized exchanges.
It is worth noting that the security of coins held in exchange wallets came into question following the crash of Sam Bankman Fried's FTX exchange late last year.
This led investors to remove the coins from exchanges and place them under their direct control.
*This is not investment advice.