Bitcoin Exchange Activity Declines as Accumulation Patterns Persist

[Ben Graham]

Following a weekend dip, Bitcoin has reclaimed the $100,000 price mark, signaling renewed short-term strength amid geopolitical tensions.

As of the time of writing, BTC is trading at $105,323, up by 4% in the last 24 hours. The price recovery arrives in broader investor sentiment shifts, both in on-chain behavior and exchange activity.

A recent analysis from CryptoQuant’s analyst Darkfost sheds light on a multi-year transition among Bitcoin holders. The analyst observes that fewer Bitcoin addresses are depositing coins onto exchanges, a trend that has persisted since the end of the 2021 market cycle.

This declining activity may not necessarily suggest fading interest in BTC, but rather a transformation in how investors interact with the asset, potentially hinting at longer-term strategies becoming the norm.

Decline in Exchange Deposits Suggests Structural Market Shift

According to Darkfost, between 2015 and 2021, the number of Bitcoin addresses depositing funds to exchanges steadily increased, peaking at an annual average of around 180,000. However, this upward trend has reversed sharply in the years since.

The 10-year moving average now hovers around 90,000, while the 30-day average has fallen to 48,000. Most recently, the daily figure dropped to just 37,000. Darkfost mentioned:

This reflects a significant behavioral change among BTC investors, which can likely be attributed to several key factors : – One major factor is the arrival of ETFs, which allow exposure to Bitcoin’s price performance without the complexity or risk of directly managing the asset.

Additionally, the current market cycle has seen relatively low retail participation, which historically contributed to exchange deposits. More notably, an increasing number of investors, ranging from individuals to institutions, are treating Bitcoin as a long-term store of value or treasury reserve asset rather than a short-term speculative vehicle.

The CryptoQuant analyst added:

These shifts, which have emerged gradually over time, are precisely what drive Bitcoin’s evolving identity in financial markets. It may well be this transformation that ultimately solidifies BTC’s role as a store of value.

Bitcoin Whale Accumulation Patterns Emerge Amid Lower Volume

In a separate analysis, another CryptoQuant analyst, Mignolet, focused on activity by large holders on the Bybit exchange. He highlighted that as general market interest and trading volume diminish, the trading patterns of whales become more visible.

Mignolet noted that previous periods of reduced sentiment and low volume often saw significant whale accumulation, which historically preceded upward price movements.

This pattern, according to Mignolet, appears to be repeating. Since Bitcoin’s local bottom in April, consistent accumulation by large entities has been observed on Bybit.

He suggested this could be a signal of underlying market confidence, particularly when retail activity is minimal. While not a guaranteed forecast, historical parallels imply that such behavior may again precede broader price strength, lending weight to ongoing consolidation as a potential setup for future momentum.

Featured image created with DALL-E, Chart from TradingView