Bitcoin has been on a near-unstoppable rally since March’s lows of $3,700. The cryptocurrency at last week’s highs was up more than 170% from the lows, tapping $10,100 after a spectacular jump higher.

This trend has been marked by crypto investors withdrawing their BTC off exchanges en-masse in a strong boost to Bitcoin’s medium-term bull case.

Bitcoin Is Being Withdrawn Off Exchanges En-Masse

Prominent Bitcoiner Jameson Lopp , the amount of BTC held by both BitMEX and Bitfinex — the leading futures exchange and a top spot exchange, respectively — has “reached new lows following the March 12th crash.” Coin Metrics’ chart below indicates that Bitfinex now holds 93,800 BTC — not a small sum, but almost exactly 100,000 coins fewer than it held on March 13th. Similarly, BitMEX’s supply is down to 216,000 BTC from a March peak of 315,000 coins — again a decrease of almost exactly 100,000 coins. The coins withdrawn have a value that amounts to over $1.7 billion. See more

The amount of BTC held by BitMEX and Bitfinex has reached new lows following the March 12th crash. Bitfinex now holds 93.8K BTC, down from 193.9k on March 13th. BitMEX’s BTC supply is now down to 216.0K BTC, down from a peak of 315.7K on March 13th. H/T — Jameson Lopp (@lopp)

While the data Lopp mentions excludes other top exchanges, blockchain analytics firm Glassnode last month that the aggregate exchange balance has also been decreasing.

This would mean that the sentiment that all of the Bitcoin withdrawn is being sent to other exchanges from the aforementioned incumbents is somewhat incorrect. On its data, Glassnode remarked that it is a likely sign that Bitcoin investors are turning to a more long-term investment strategy, instead of rapidly trading coins in the hopes of making quick profits.

How This Trend Could Boost Bitcoin

Although Bitcoin seemingly moves without rhyme or reason, the cryptocurrency is just like any other market in one key way: most movements in the price of a free-market asset are

This means that assuming consistent demand, the decrease in the supply of an asset in a market should result in an increase in the equilibrium price. And assuming consistent supply, an increase in demand should also increase prices. Bitcoin being withdrawn from exchanges en-masse, which decreases the likelihood the owners of coins sell their holdings, decreases the market supply of Bitcoin. Assuming consistent demand, prices should rise. Now add to this the fact that BTC’s block reward halving just took place. This strongly implies that the supply of coins being sold on the market should decrease even further, further increasing the potential equilibrium price.

Demand for BTC Is Increasing

Simultaneously, analysts say that demand for cryptocurrency is increasing and will continue to increase moving forward.

Alex Kruger, an economist closely tracking the crypto space, recently noted that with legendary macro investor Paul Tudor Jones announcing his support for Bitcoin, “incremental demand” for this space is “coming”:

“The Paul Tudor Jones letter is the single most bullish thing ever written about bitcoin, and it came from Tudor himself. I see it as a game changer. Think many macro investors will follow. Mandate changes and onboarding take time,” the analyst .

Related Reading: Industry CEO Still Convinced Bitcoin Rockets to $50,000 In 2020: Here’s Why

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