Bitcoin Rally Could Continue Based on On-Chain Trend
The analytics firm Santiment has analyzed the recent trends in the Supply on Exchanges for Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) to determine the potential impact on the cryptocurrency market.
Supply on Exchanges: Deposits vs. Withdrawals
The Supply on Exchanges metric tracks the percentage of a coin’s total circulating supply that is currently held by centralized exchanges. An increase in this metric indicates deposits, while a decrease suggests withdrawals.
For volatile coins like Bitcoin and Ethereum, net deposits may signal that investors are looking to sell, which can negatively impact prices. Conversely, withdrawals can be bullish as they indicate a desire to hold onto tokens.
Tether Sees Net Deposits
Santiment’s data reveals that while BTC and ETH have experienced supply moving off exchanges, USDT has seen net deposits. Stablecoins like Tether are used by investors seeking stability in the volatile cryptocurrency sector. Deposits of stablecoins could indicate a plan to buy back into Bitcoin and other cryptocurrencies, potentially leading to a bullish effect.
Potential for Continued Bullish Trend
The increase in buying power from stablecoin holders suggests that the mid-term bull cycle could still have momentum, particularly with the Bitcoin halving approaching in April. BTC has recently broken above the $43,300 mark, indicating a recovery.
Hot Take: Bitcoin Rally Supported by On-Chain Trends
The recent movement of supply on exchanges for Bitcoin, Ethereum, and Tether provides insights into investor sentiment and potential market trends. While net deposits for volatile coins may indicate selling pressure, withdrawals can signal long-term holding intentions. The influx of stablecoin deposits suggests a desire to buy back into Bitcoin and other cryptocurrencies, potentially fueling a continued bullish trend. With the Bitcoin halving approaching, the increase in buying power from stablecoin holders may contribute to the ongoing rally. Overall, the on-chain data supports the notion that the Bitcoin rally has room to continue.
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