Amount of Bitcoin Stored on Exchanges at Lowest Point Since May 2019
On-chain analytics provider Santiment has reported that the supply of Bitcoin sitting on exchanges has fallen to levels not seen since May 2019. This is usually considered bullish as investors take BTC off exchanges when they’re in a position to hold and are not interested in selling.
Santiment called it a “good sign of sell-off risk decreasing.” Bitcoin prices have been falling this week in the wake of a renewed crackdown in China and another round of FUD (fear, uncertainty, and doubt) that followed it.
Since Monday, BTC prices have slid around 2.4%, which is a pretty normal range for an average trading week.
The supply of #Bitcoin sitting on exchanges has fallen to levels not seen since May, 2019. This is a solid indication of less sell-off pressure for $BTC. Meanwhile #Tether supply hasn’t been this high since June, an indication of increased buy power. https://t.co/2riFvhnXUE pic.twitter.com/wdB7FEQrmk
— Santiment (@santimentfeed) September 27, 2021
Stablecoins Ready to Buy?
Santiment also observed that the amount of stablecoins, specifically Tether, residing on exchanges has not been this high since June, suggesting that buying side pressure could be increasing. There is 17.6% of the entire supply of USDT sitting on trading platforms at the moment, according to the analytics firm.
Glassnode has backed up the hodl narrative in its weekly report issued on Monday, which states that on-chain activity for Bitcoin has been in decline. Active on-chain entities are in what it describes as a “bearish activity channel” as network participation slows down.
“This adds weight to the argument that the market may be dominated by HODLers and traders, with less participation by newer entrants and retail speculators.”
There is also the premise that exchanges are now using batch processing of transactions, and Lightning Network adoption has surged, which may make some of the metrics misleading.
By observing the net entities’ growth, the analytics provider concluded that the majority of today’s market participants are longer-term hodlers and accumulators. Large-scale accumulation occurs in both early bull markets and later-stage bear markets.
Glassnode also reported that the amount of Bitcoin that is “highly liquid” has returned to December 2018 levels, further supporting the outflow from exchanges metrics.
Bitcoin Price Outlook
BTC was changing hands around $42,000 at the time of writing, following a 3.5% slide on the day. Resistance is at $45,600, where the 200-day moving average lies, and that indicator has now started to drop, suggesting a longer-term bear pattern according to Tradingview.
Support currently lies at $41,150, and the asset has been trending down for the past 3 weeks.
OhNoRipple via https://www.ohnocrypto.com/ @Martin Young, @Khareem Sudlow
