Bitcoin Exchange Supply Rises: What Does It Mean for You?
Data from on-chain analytics firm Santiment reveals that there has been a recent increase of 3.1% in the Bitcoin exchange supply. This refers to the percentage of total circulating Bitcoin that is currently held in centralized exchange wallets. When this metric rises, it indicates that investors are depositing more coins to these platforms, often in preparation for selling. This can potentially signal a market selloff, which is bearish for the price. On the other hand, a decrease in this metric suggests that investors are withdrawing coins from exchanges, indicating accumulation and a reduced likelihood of selling. This can be bullish in the long term. The supply on exchanges had been declining, but it has now seen a bi-weekly increase of 3.1%, the highest since March. This rise could be attributed to investors making transactions to the platforms for selling purposes.
Bitcoin’s Surge to $26,400 Retraced
Bitcoin recently experienced a surge towards the $26,400 level, but it quickly retraced back to $25,800. This retracement suggests that investors who had deposited their coins on exchanges have now initiated selling, resulting in a bearish impact on the asset. It is worth noting that the surge coincided with the Grayscale rally, and the subsequent deposits may have been made in anticipation of selling during the rally. Despite the price plunge, the supply on exchanges continues to rise, currently sitting at 5.975%. This indicates that investors are motivated to secure any profits they can and are preparing for potential exit opportunities.
Hot Take:
The recent increase in Bitcoin supply on exchanges and the quick retracement of its price surge may indicate a potential market selloff. Investors depositing their coins on exchanges for selling purposes could contribute to a bearish trend. However, the continued rise in supply on exchanges suggests that investors are motivated to secure profits and are preparing for exit opportunities. It remains to be seen how these factors will impact the overall market and the price of Bitcoin in the coming days.
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