The amount of Bitcoin tokens held across all cryptocurrency exchanges dropped dramatically earlier this week. Traders withdrew over 110,000 BTC on August 3 – a day after the BTC/USD rate plunged from $12,000 to as low as $10,500. On-chain analyst Cole Garner theorized the outflow as a sign of whales buying the Sunday sell-off.

A $1.23 billion worth of Bitcoin tokens moved out of all the cryptocurrency exchanges a day after BTC/USD fell $1,500.

According to data fetched by CryptoQuant, Bitcoin balances on trading platforms fell from roughly 2.50 million to 2.39 million on Monday. It was the same day the cryptocurrency rebounded from its local support level near $10,500 to approach $11,500.

The sequence led on-chain analyst Cole Garner to assume that Bitcoin whales–entities holding larger quantities of crypto tokens– saved the cryptocurrency from falling anywhere below $10,500. They bought the dip and later withdrew their winnings from exchanges to become “HODLERS” – a slang term for holders.

“The amount of #Bitcoinheld on exchanges just dropped off a cliff,” tweeted Mr. Garner. “It happened two days ago – whales bought up the selloff. $BTC flowing out of exchanges is bullish.”

As it appears, the massive withdrawal shortly followed a modest spike in the Bitcoin price. As of Thursday, BTC/USD had established a weekly top at $11,615.

Mr. Garner’s bullish theory met with limited skepticism. One of the respondents to his tweet, CryptoQuant itself, argued that exchanges, too, periodically migrate cryptocurrencies from their hot wallets to cold wallets.

The practice limits the risks of losing all the coins should there be a security breach.

On Tuesday, Binance, one of the largest cryptocurrency exchanges by volume, moved nearly 68,101 BTC to a newly created wallet. CryptoQuant noted that it was still not clear whether the address belonged to a custodian service or an offline wallet. The portal nevertheless made a bullsh case, stating:

“Even if it’s Binance’s, it could be a bull signal since Binance decided to reduce the portion of hot wallets in charge of user withdrawals.”

The theories appeared as Bitcoin continues to trade below $12,000, its year-to-date high. Observers noted that the cryptocurrency could attempt a close above the said level as long as it trades under the macro influence.

In retrospect, Bitcoin broke above $10,500 on increasing bids for safe-haven assets among mainstream investors. As the bond market became too expensive, yields fell to their record lows, and US dollar continued its decline, hedging assets such as gold, silver, and bitcoin surged higher.

“If the dollar continues to depreciate, there is a high probability that #Bitcoin will continue to rise,” said Jay Hao, the CEO of cryptocurrency exchange OKEx.

That also explains why the HODLING sentiment lately surged among the Bitcoin investors.

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