Bitcoin Exchange Supply Tumbles to 7.53%: Do the Bulls Have the Upper Hand?

Key Points

• The supply of Bitcoin on exchanges has dropped to 7.53%, indicating increased investor confidence.
• Rising network activity and technical indicators suggest that Bitcoin may be entering a bullish phase.

The supply of Bitcoin (BTC) on exchanges has plummeted to a mere 7.53%, its lowest level since February 2018. As of now, Bitcoin is trading at $87,075.28, a 0.95% decrease in the last 24 hours.

This reduction in supply is a result of more investors deciding to ‘hodl’ their BTC. This trend indicates growing institutional confidence in Bitcoin’s value over the long term. With fewer individuals willing to sell, Bitcoin could experience increased volatility due to the diminishing liquidity in the market.

Why is Bitcoin’s exchange supply dwindling?

The sharp decrease in Bitcoin’s exchange supply is a reflection of a change in investor sentiment. More and more investors are choosing to hold onto their Bitcoin rather than selling it, indicating an increased confidence in Bitcoin’s future prospects.

With a reduced supply, price fluctuations are more likely as demand begins to outstrip supply. The growing confidence in the market means fewer holders are willing to sell, which further limits Bitcoin’s exchange supply.

How active is the Bitcoin network?

The activity of the Bitcoin network is also indicative of growing investor interest. The number of active addresses has risen by 1.16%, reaching 10.17 million. This increase suggests a larger number of users are engaging with the Bitcoin network, either by sending or receiving funds.

Furthermore, the transaction count has increased by 0.74%, amounting to over 418,000 transactions. This rise in network activity suggests a growing involvement in Bitcoin, which could potentially lead to increased demand and upward pressure on the price.

Technical analysis of Bitcoin’s price chart shows promising signs. Currently, the Fibonacci retracement levels suggest that Bitcoin has found support at the 0.236 level, around $81,325. Additionally, the RSI is at 51, indicating that Bitcoin is neither overbought nor oversold. This suggests that Bitcoin has room for movement in either direction, with a potential breakout possible if it continues to hold above key support levels.

Data on Bitcoin’s liquidations shows a near balance between long and short liquidations, with $3.65 million in long liquidations and $3.56 million in short liquidations. This balance indicates that the market is evenly poised, with both optimistic and cautious traders adjusting their positions. The balanced liquidations suggest a market equilibrium, awaiting the next significant price movement.

In conclusion, the low supply of Bitcoin on exchanges, increased network activity, and promising technical indicators suggest that Bitcoin might be entering a bullish phase. The growing number of holders, coupled with key support levels, indicates potential upward momentum. However, it’s important to note that short-term volatility could still affect the market.