Increasing Sentiment of Holding Bitcoin Among Investors
Investors are increasingly holding onto their Bitcoin, as indicated by on-chain data. The cryptocurrency has been performing well and reaching new yearly highs since the beginning of the month. Additionally, exchange data from CryptoQuant suggests that Bitcoin might be preparing for a sustained bull run. According to the platform, the supply of Bitcoin available for purchase on exchanges has dropped to its lowest levels since 2017.
Exchange Supply Drops To Lowest Level In Six Years
The supply of Bitcoin on centralized exchanges has been steadily decreasing since 2020, according to CryptoQuant’s exchange reserve chart. It reached a high of over 3.2 million BTC in 2020 but has been declining ever since. The outflow was accelerated in the last quarter of 2022 when the collapse of FTX exchange caused panic among investors, leading them to opt for self-custody in cold wallets. Exchange reserves dropped from 2.512 million BTC to 2.158 million BTC in just one month.
Outlook For Bitcoin Price: Bull Signal?
The decrease in exchange supply is seen as a bullish signal for Bitcoin and other cryptocurrencies. It has historically been associated with the start of significant bull runs for Bitcoin. Despite there being technically more bitcoins available now, increased adoption is making it harder for traders to acquire the asset. In 2020, when there was a drastic drop in exchange reserves, Bitcoin went on to reach its all-time high the following year.
Hot Take: Bitcoin Poised for Extreme Gains
Bitcoin is currently leading the inflows into the crypto industry, with Coinmarketcap’s Fear and Greed Index indicating extreme greed at 82. The cryptocurrency recently broke through $44,000 for the second time in a week and has seen a 14% increase in the past seven days. Analysts predict that Bitcoin is set for significant gains in 2024, with some forecasting a price target above $100,000.
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