Investor confidence seems to be increasing in the cryptocurrency market lately, and bitcoin has been a big beneficiary of this positive trend. Consequently, there has been continued accumulation of btc among large-scale investors despite the somewhat frustrating price action.
The price of the leading cryptocurrency may have ended May below the psychological mark of $70,000, despite touching that level a couple of times in the last two weeks of the month. The latest on-chain data suggests that faith in bitcoin has only continued to grow stronger.
Is btc primed for a price rally?
Prominent crypto analyst Ali Martinez shared through a x.com/ali_charts/status/1796512450382077957″ target=”_blank” rel=”nofollow”>post on the platform that substantial amounts of bitcoin have left centralized exchanges. This on-chain observation is based on the CryptoQuant Exchange Reserve metric, which tracks the amount of a particular cryptocurrency in the wallets of all centralized exchanges.
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An increase in the value of the metric indicates that investors are making more deposits than withdrawals of a crypto asset (bitcoin, in this scenario) on centralized exchanges. Meanwhile, when the metric loses value, it implies that more coins are moving than to trading platforms.
According to Martinez's post, over 37,000 btc (worth approximately $2.53 billion) have been transferred from crypto exchanges in the last three days. This major exodus of funds indicates a change in sentiment and long-term holding strategy of bitcoin investors.
While it is difficult to say the exact reason behind the massive outflow from the bourses, the movement of funds from trading platforms suggests a rise in investor confidence. This indicates that many investors could be convinced of the future promise of bitcoin, thus choosing to store their assets in long-term self-custody wallets.
What's more, the downward spiral of bitcoin supply on centralized exchanges could trigger an upward rally in the price of the leading cryptocurrency. The sustained decline in the balance of btc on exchanges could cause a supply crisis.
For context, supply crisis refers to a scenario or period during which the supply of a particular asset is less than its demand, resulting in an increase in the value of the asset.
bitcoin price at a glance
At the time of writing, the price of bitcoin is around $67,489, reflecting a 1.5% drop in the last 24 hours. This slow performance over the past day underscores the top cryptocurrency's struggles over the past week. According to data from CoinGecko, the price of btc is down almost 2% in the last seven days.
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Featured image from iStock, chart from TradingView
