Kraken Sees Biggest Bitcoin and Ethereum Outflows Since 2017, What’s Happening?

Kraken sees biggest Bitcoin and Ethereum outflows

Recent data show that Kraken, one of the market’s leading cryptocurrency exchanges, has witnessed the largest outflows of Bitcoin (BTC) and Ethereum (ETH) since 2017. This signals a significant shift in digital asset holdings, which could have broad implications for the market .

Kraken Historical Streams, What’s Happening?

Insights from Dominando Cripto’s João Wedson shared on CryptoQuant’s quick-access platform highlight a surprising trend at Kraken. The exchange recorded an outflow of 49,100 BTC, translating to approximately $3.33 billion.

This massive withdrawal marks the largest movement of funds on the exchange in dollar terms. Ethereum was not far behind, with around 572,100 ETH, valued at around $2.15 billion, also leaving the platform.

This substantial reduction has reduced Kraken’s Bitcoin reserves to levels last seen in 2018, holding around 122,300 BTC. Even more notable, Ethereum reserves fell below one million for the first time since early 2016.

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While this news may initially seem alarming, Wedson reveals that address screenings indicate that asset movements were “synchronized and rapid,” suggesting that these outflows may have been the strategic repositioning of reserves by Kraken itself, or part of a institutional strategy.

Anticipating a reduction in supply and increase in prices

However, the timing of these moves is crucial, occurring as the market absorbs the impact of the SEC’s recent approval of the SEC. Spot Ethereum ETFs.

This regulatory nod has accelerated the reduction of ETH available on centralized exchanges, raising anticipations of a possible supply squeeze that could positively influence the price of Ethereum.

The broader context involves a significant shift away from exchanges as the primary holders of crypto assets. Market analyst Ali noted a sharp decline in Ethereum held on exchanges, with around 777,000 ETH withdrawn following the ETF’s approval, suggesting evolving market dynamics where major participants may be moving towards greater self-custody amid the surge institutional involvement.

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This trend is corroborated by a broader analysis of foreign exchange balances, which shows a continuous decreasesuggesting a strengthening of preference for keeping cryptocurrencies off exchange platforms.

Such moves are traditionally seen as bullish indicators, implying reduced selling pressure and increased long-term retention behaviors among investors.

At the time of writing, Ethereum is trading at $3,777 after peaking at $3,850 in the last 24 hours. The current trading price represents a 0.7% increase on the previous day, despite a nearly 5% drop last week. Meanwhile, Bitcoin is currently priced at $69,253, having retreated from a 24-hour high of $70,188.

BTC price is moving sideways on the 4-hour chart. Source: BTC/USDT in TradingView. with

Featured image created with DALL-E, TradingView chart

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