As an experienced analyst, I believe that the current trend in Bitcoin’s supply on exchanges is a bullish sign for the cryptocurrency. The fact that around 942,000 BTC is currently available on trading platforms represents a decrease from previous levels, and this reduction in available supply could potentially limit selling pressure. This trend suggests that investors are holding onto their Bitcoin rather than offloading it, which can help reduce downward price pressure across the broader market.
This week, Bitcoin‘s value peaked at around $70,000 before experiencing a significant decline. Despite reaching this high point, it was unable to maintain the upward trend.
Currently, Bitcoin, the world’s biggest cryptocurrency, is valued above $67,000 during my writing process. However, recent exchange data indicates a decrease in supply levels, which have not been this low since December 2021. This could potentially signal an upcoming bullish trend.
Bitcoin Scarcity on Exchanges
Based on Santiment’s recent tweet, the amount of bitcoin held on exchanges has dropped to a level not seen since late 2021. At present, approximately 942,000 Bitcoin units are accessible on these trading venues.
Despite bitcoin’s failure to bounce back significantly, the decrease in its exchange-traded volume may lessen the intensity of selling forces. In essence, this situation reflects a strong conviction among investors that they should keep their coins instead of selling them, suggesting a bullish outlook.
The amount of Ethereum and Tether held on exchanges has been growing. Currently, there are approximately 18 million Ethereum tokens in circulation. Although this figure is below the record high of 29.89 million Ethereum reached in May 2020, it’s significant because it occurs as investors anticipate the debut of a spot Ether Exchange-Traded Fund (ETF) in the United States.
Further, the quantity of Tether (USDT) in circulation on cryptocurrency exchanges is nearing a record high of around 16.95 billion US dollars, which was reached in July 2022. The substantial amount of this stablecoin held on exchanges could be perceived as a positive sign, implying that investors are holding back and waiting to make purchases.
In historical context, the restricted availability of Bitcoin for trading implies that its owners are reluctant to part with their holdings. This reluctance to sell can alleviate the market-wide pressure leading to price decreases.
“Bitcoin’s supply on exchanges has now dropped to its lowest level since December 2021 (~942K coins). Meanwhile, Ethereum and Tether are moving back on. Historically, there is less drop-off risk for all of crypto while $BTC’s available supply to be sold is limited.”
Bitcoin Whales Are Buying
The trend of Bitcoin accumulation can be strengthened by CryptoQuant’s findings, which reveal over 20,000 BTC being transferred into large investor wallets. It seems that these substantial investors have taken advantage of the recent price downturn to expand their Bitcoin holdings.
Such actions from whales signify strong investor interest amidst short-term market fluctuations.
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2024-06-13 19:25