bitcoin price has slowed somewhat since hitting the all-time high of $73,000, moving mostly sideways since mid-March. However, with less than a fortnight until the halving event, all eyes will be on the leading cryptocurrency and everything that belongs to it over the coming weeks.
According to recent on-chain observation, the supply of btc on exchanges has been steadily declining over the past few months. This trend has sparked debates about what this could mean for the price of bitcoin, both in the short and long term.
$7.55 billion transferred from Exchange wallets in the last month
Prominent cryptography expert Ali Martínez x.com/ali_charts/status/1776634456071147971″ target=”_blank” rel=”nofollow”>took the x sharing platform that a significant amount of bitcoin was moved out of crypto exchanges over the last month. The relevant metric here is Glassnode Exchange Balance, which tracks the total amount of a cryptocurrency (bitcoin, in this case) held across all exchange addresses.
A decrease in the value of this indicator implies that investors are making more withdrawals than deposits of bitcoin on centralized exchanges. The increase in the metric, on the other hand, indicates that more btc is entering these exchanges than leaving.
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Chart showing bitcoin balance on all exchanges | Source: x.com/ali_charts/status/1776634456071147971" target="_blank" rel="nofollow">Ali_charts/x
According to Martínez, in the last month around 111,000 btc (worth approximately $7.55 billion) have been transferred from well-known cryptocurrency exchange wallets. Typically, an exodus of funds (of this magnitude) suggests a significant change in bitcoin investor sentiment.
While the exact reason behind such a massive bitcoin move is still unclear, the flow of funds from trading platforms suggests a growth in investor confidence. This implies that btc owners are more interested in holding their assets for the long term rather than selling them for short-term profits.
Furthermore, this continued downward trend in the btc balance on exchanges could set the stage for a bullish rally in the price of bitcoin. A sustained drop in the supply of btc on centralized exchanges could result in a supply crisis, a scenario in which the supply of a particular asset is less than its demand, leading to an increase in its value.
Another potential bullish catalyst for bitcoin price is the upcoming halving event, which is expected to occur on April 18, 2024. With miner rewards halved and bitcoin production slowing, it is expected that this event affects the value of btc. affirmatively.
bitcoin price at a glance
At the time of writing, the price of bitcoin stands at around $69,537, reflecting a 2.7% increase in the last 24 hours.
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bitcoin price on the verge of $70,000 on the daily timeframe | Source: BTCUSDT chart on x/BNC5JcjJ/" target="_blank">TradingView
Featured image from iStock, chart from TradingView
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