Bitcoin Exchange Supply Has Dropped to Historic Lows
The recent decline in BTC supply on exchanges has raised concerns about Bitcoin prices. Despite institutional investors accumulating Bitcoin and opting for self-custody storage options, the percentage of Bitcoin on exchanges has reached its lowest level since August. Historically, a decrease in exchange supply has led to price rallies, but this trend has not been observed in September.
Bearish Sentiment Has Seen Trading Activity Drop Significantly
While whale investors have been accumulating Bitcoin, bearish sentiment has negatively affected trading activity. Daily trading volume for Bitcoin has declined by 57% since August, indicating a drop in investor interest. Typically, spot trading volumes decrease in bear markets. However, when trading volumes rise and exchange reserves drop, Bitcoin price often rallies.
BTC Price Prediction: Bulls are In Prime Position to Target $30,000
The drop in Bitcoin exchange supply could provide an opportunity for bulls to push the price towards $30,000. The entry price distribution of current BTC holders suggests that if Bitcoin surpasses the initial resistance at $28,500, the low market supply could trigger a bounce towards the target price. However, if the price drops below $25,000, bears may invalidate this prediction.
Hot Take: Bitcoin Price Depends on Market Demand
The recent decline in BTC supply on exchanges and the accumulation by institutional investors have not resulted in a price rally. The buying pressure from whales is unlikely to trigger a significant increase unless there is a surge in market demand. However, with exchange supply reaching monthly lows, Bitcoin is poised for a rapid rally when market sentiment turns bullish.
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