Massive ICP Outflows Hint at a Bullish Move

According to ICTerminal, the past two weeks have seen an unusually large outflow of ICP from exchange wallets. The screenshot above shows an example from Coinbase.

Now that's quite a surprise! Usually, headlines focus on stablecoin inflows to exchanges or Bitcoin outflows — sometimes Ethereum as well — and those are traditionally seen as bullish signals.

But we rarely hear about such sharp outflows of other cryptocurrencies. Altcoins are mostly used for speculation, and if a trader buys one on an exchange, there's usually little reason to withdraw it. After all, they’ll likely sell it right there, in the same familiar environment where they bought it.

That said, a sudden outflow like this doesn’t necessarily mean holders moved their ICP into long-term storage. After all, swapping ICP for stablecoins or other crypto is easy to do off-exchange too. On rabbit.io, such swaps are available 24/7. No registration needed — just enter the amount and the address. You can send ICP from your non-custodial wallet and receive any other asset directly to your own wallet as well.

Still, I see this outflow as a bullish signal. Market prices are formed on exchanges, and price is always a balance of supply and demand. If the supply on exchanges has dropped this sharply, a price increase seems almost inevitable.