The total BTC balance on exchanges continuously decreasing since 2020. This shows that investors are withdrawing and storing their BTC in hardware and cold wallets. They are accumulating BTC for long term. Less BTC on exchanges means less selling pressure.
Of course it's necessary incase what will happen to the exchanges where your btc is stored. As the matter of fact mostly didn't last long and turn into scam exchange, so its better to withdraw and put it into hardwer wallet or anywhere where you can assure it's realy safe... Especially now which is the fee is too high and keep increasing, for me in view there is a possibility some of the exchange will collapse without knowing..