The number of bitcoins being held on cryptocurrency exchanges has dropped to a two-year low, as the balance of wallets associated with cryptoasset exchanges has been steadily dropping since February of this year.

According to on-chain analytics firm Glassnode, the aggregate number of BTC being held on trading platforms has dropped to levels that hadn’t been seen since 2018, after a steady accumulation phase came to a halt in February. Since then, the BTC balance on exchanges saw a drop of over 21.6%.

Arcane Research tweeted out the data, pointing out there was a short sideways movement in November.

Speculators have pointed towards two potential reasons for the trend. Some have suggested users may be wary of leaving their cryptoassets on trading platforms, given that exchanges are often hacked, and even top exchanges like OKEx may have to freeze withdrawals. This year OKEx froze them after losing contact with an executive with access to its private keys.

Others suggest that more and more bitcoin buyers are becoming long-term holders, and to keep their funds safely under their control they are moving them to wallets under their control. Data shared by Glassnode shows that the number of bitcoin addresses holding at least 1 BTC has hit a new all-time high.

It’s worth noting, however, most bitcoiners will likely have less than a hole bitcoin in their wallets, which could imply self-custody is indeed growing. Long-term holders, according to Glassnode’s Liesl Eichholz, have been notably selling their coins as the price grows.

In a blog post, Eichholz wrote that on-chain data shows older coins are being sold as the price of BTC grows, in a trend that “has historically been extremely bullish.” The analyst detailed the network’s bitcoin’s Entity-Adjusted ASOL (Average Spent Output Lifespan) shows long-term holders are selling BTC and realizing profits.

While the trend could be seen as a bearish signal, Eichholz writes it shows the total supply held by long-term holders is decreasing and added the decrease leaves “room for new retail investors to enter the market, which has historically driven bitcoin’s largest bull markets.

Featured image via Pixabay.