Bitcoin Netflow Turns Negative As 3,600 BTC Leaves Exchanges Daily

Starting March 10, 2025, a significant shift occurred in Bitcoin trading dynamics. The daily netflow of Bitcoin turned negative, indicating that more Bitcoin is being withdrawn from exchanges by retail traders than being deposited. According to Axel Adler Jr., a prominent analyst, approximately 3,600 BTC are leaving exchanges daily, a trend viewed as bullish by the market.

Netflow, which compares the deposits and withdrawals of BTC to exchanges, provides insight into the balance between those looking to sell and those looking to buy cryptocurrencies. A negative netflow suggests that more Bitcoin is being accumulated outside exchanges, reducing the supply available for trading. This trend boosts investor confidence as it signals potential price increases. The sustained decline in netflow began after the December peak of 12,100 BTC, which indicated strong selling pressure in the Bitcoin market. However, the current trend suggests a period of accumulation.

This transition is evident in the chart provided by Axel Adler Jr., which shows periods of buying (green areas) marking accumulation and periods of selling (red areas) indicating a loss of Bitcoins from exchange reserves. Since early 2025, data suggests that both retail investors and institutions are becoming more confident and are buying more Bitcoin.

Between November 2024 and May 2025, the amount of Bitcoin held by centralized exchanges (CEX) decreased by close to 668,000 BTC. While this indicates high buying activity, it does not necessarily mean a dearth of Bitcoin on exchanges. As of June 2025, approximately 2,432,989 BTC remain on exchanges, indicating that traders still have liquidity.

The chart provided by CryptoQuant shows that exchange reserve numbers (in orange) have steadily decreased as the price of Bitcoin (the black line) has increased. This decrease in reserves may indicate that long-term holders are removing BTC from exchanges for safer storage or for trading outside the spot market. This often limits the sell-side supply and raises prices.

Despite the decrease in reserves, the value of Bitcoin held on exchanges stands at about a quarter of a trillion dollars, or $253.4 billion based on current Bitcoin rates. This substantial amount shows the potential for significant trading activity and the availability of support, reducing the risk of extreme volatility due to liquidity issues.

The trends in Bitcoin exchange netflow and exchange reserves both suggest that the bullish cycle is continuing and is expected to mature by mid-2025. The movement of more BTC into storage rather than exchanges may result in less BTC being available for exchange trading, which typically raises prices. Additionally, the decline in exchange reserves since late 2024 reflects that investors are holding onto their Bitcoin rather than selling, ensuring ample liquidity. These trends indicate a shift in market behavior from rapid selling to methodical buying activity, bolstering investor confidence.

The large amount of BTC sold in December 2024 contrasts sharply with the current situation, where Bitcoin is being bought, signaling a shift to the bullish phase. Overall, the supply of Bitcoin on exchanges is down, withdrawal speeds are higher, and liquidity balances are stable. These are clear indicators that the bullish trend is still holding strong in mid-2025. Along with studying pricing trends, traders and investors are advised to consider these metrics to gain a comprehensive understanding of Bitcoin's trajectory in the cryptocurrency market.