Bitcoin (BTC) is looking to recover from the recent downtrend that saw a drop of more than 7% in four days. The asset redemption fee comes on the back of a significant decrease in exchange withdrawals.
Notably, the proliferation of BRC-20 patterns and tokens on the Bitcoin network created massive and unexpected web congestion, resulting in significantly higher on-chain fees. As previously reported by crypto.news, Binance has been forced to suspend a batch of BTC withdrawals on its platform, citing increased fees.
However, data from CryptoQuant indicated that the decision could be caused by an increase in BTC withdrawals on Binance. Data shows that Binance saw massive outflows of 175,650 BTC 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 Index shows that exchanges have seen huge net inflows of BTC since May 2. From May 2nd to May 9th, net inflows were negative in six days and positive in just two, resulting in a total of – 38,865 BTC in net inflows since May 2nd.
However, these outflows could already be abating, as Glassnode data indicates that the number of BTC withdrawals from exchanges has fallen to a one-month low of 2,260,161.
Amidst this decline, 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 rally to $27,849, but the asset encountered resistance in the area.
Bitcoin is once again seeking a recovery, changing hands at $27,587 at the time of reporting, with a slight increase of 0.07% in the last 24 hours. The asset must rise above the $27,000-$28,500 region if it wants to sit comfortably.