There’s a growing trend among investors to hold onto their Bitcoin, as per recent on-chain data. Since the beginning of the month, Bitcoin has been performing impressively, hitting new highs for the year. Concurrently, data from CryptoQuant suggests that Bitcoin might be preparing for a sustained bull run. The Bitcoin exchange supply, or the amount available for purchase on exchanges, has reached its lowest point since 2017 according to the on-chain analytics platform.
Bitcoin Exchange Supply at Six-Year Low
Market signals for Bitcoin are indicating a bullish trend, correlating with the anticipation of spot Bitcoin ETF applications. The exchange reserve chart from CryptoQuant shows a consistent decline in Bitcoin supply from centralized exchanges since 2020, when it peaked at over 3.2 million BTC. This outflow became more pronounced in the last quarter of 2022, following the collapse of the crypto exchange FTX, which triggered panic among investors and led to an increased preference for self-custody in cold wallets. During this time, exchange reserves plummeted from 2.512 million BTC to 2.158 million BTC within a month.
Slow Increase in Reserve on Exchanges
Early 2023 saw a gradual increase in reserve on exchanges, climbing back up to 2.240 million BTC by May. However, a shift occurred in June when filings by BlackRock and other investment companies for spot Bitcoin ETF trading in the US sparked a bullish sentiment. Since then, the reserve on centralized exchanges has been steadily decreasing. At present, the exchange reserve has dipped below 2 million BTC, a level not seen since December 2017. This six-year low is particularly noteworthy given that Bitcoin’s total circulating supply has grown since 2017. Bitcoin’s total supply now stands at 19,564,812 BTC, marking a 16% increase from December 2017’s supply of 16.78 million BTC.
Implications for Bitcoin Price
Despite the increase in total Bitcoin supply, the surge in adoption is making it increasingly challenging for traders to acquire the asset. A falling exchange supply is a bullish sign for crypto assets, and periods of low exchange supply have historically coincided with the onset of significant Bitcoin bull runs. The last time Bitcoin saw a sharp drop in exchange reserve was in 2020, which was followed by the crypto reaching its all-time high the following year.
Currently, Bitcoin is leading new inflows into the crypto industry, with Coinmarketcap’s Fear and Greed Index indicating an extreme greed of 82. Bitcoin recently surpassed $44,000 for the second time this week and has increased by 14% over a 7-day period. Many analysts predict that Bitcoin is set for significant gains in 2024, with a price target above $100,000.
For those looking to keep a close eye on these market trends, the cryptoview.io application offers a comprehensive platform for tracking Bitcoin’s exchange supply and other key metrics.
Check out cryptoview.io nowPlease note, the content of this site should not be interpreted as investment advice. Investing involves risk, and when you invest, your capital is at risk.
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