Since July 2019, there has been a significant drop in the amount of Bitcoin deposits on crypto exchanges. This shows how investors are holding onto their bitcoins instead of selling them on trading platforms.

The net inflow of bitcoin onto exchanges gives a good indicator of the sentiment around the market. During a market crash, investors add to the selling pressure by transferring their bitcoins onto exchanges for sale. During a rally, investors tend to withdraw their bitcoins from exchanges and move them to their personal wallets.

According to data from Glassnode, the number of bitcoins deposited on exchanges declined from 55,000 to 25,000 between July 2019 and January 2020. The number of deposits started to decline as bitcoin’s price recorded its yearly high at around $14,000, says Glassnode.

$BTC exchange deposits continue to decline as investors have fewer incentives to sell.



During last summer's rally, we saw highs of over 60k unique daily deposits – likely investors taking profit. Since then this has decreased by nearly 60%, down to 25k.https://t.co/v3VdHPFzy2 pic.twitter.com/5zoRwnkVPP — glassnode (@glassnode) January 30, 2020

The fall in deposits and the recent surge in BTC price can be attributed to the upcoming block reward halving slated for May 2020. Most often than not, it is the miners that apply selling pressure on the market by selling their BTC to settle their operational costs.

The notable decline in deposits indicates that both investors and miners are seemingly reluctant to sell their BTC in the short to medium term. They are probably anticipating that the halving would have an actual impact on the coin’s price.