Crypto News

This Bitcoin Metric Just Dropped 4%—And It’s Bullish For The Market

  • Bitcoin has rallied by approximately 25% over the past two weeks as Ethereum has wrested the market higher.
  • The asset currently trades at $11,750 as of this article’s writing, with the uptrend still intact.
  • A crucial on-chain metrics, the number of BTC held by exchanges, has been dropping over recent days.
  • Analysts say that this trend is bullish for the cryptocurrency market as it effectively reduces Bitcoin’s selling pressure.
  • As this has transpired, analysts are seeing multiple factors that suggest demand for BTC should increase.
  • The simultaneous confluence of a decreasing supply of and an increasing demand for BTC should cause the cryptocurrency to increase in value.

Bitcoin Held By Exchanges Drops by 4% Within Hours—and Analysts Think It’s Bullish

The beautiful thing about Bitcoin is that if you have enough information, everything is transparent. You can peer into the wallets of billionaires, companies, and individuals to verify their claims, to figure out where funds have gone, and otherwise. Whole companies have been created due to this very premise as price signals can be derived from these trends.

According to blockchain data from CryptoQuant shared by analyst Cole Garner, the amount of BTC held by exchanges has “dropped off a cliff.”

On August 3rd, the “all exchanges reserve” metric on CryptoQuant printed a decline of approximately 4% from 2.49 million to 2.39 million coins.

Garner sees this as a positive sign for Bitcoin, arguing that the metric suggests “whales bought the sell off”

“The amount of #Bitcoin held on exchanges just dropped off a cliff. It happened two days ago – whales bought up the selloff. $BTC flowing out of exchanges is *bullish*”

Image

Chart of BTC's price action and CryptoQuant's all exchanges reserve metric shared by Cole Garner (@ColeGarnerBTC).

CryptoQuant provided a slightly different explanation, writing to Garner on his Twitter:

“68101 BTC transferred from Binance to a newly created wallet, and not clear whether it’s their new cold wallet or the 3rd party custody. Even if it’s Binance’s, it could be a bull signal since Binance decided to reduce the portion of hot wallets in charge of user withdrawals.”

Demand Set to Increase

Underscoring this decrease in the market supply of Bitcoin are the creation and propagation of many demand catalysts.

Fidelity Digital Assets, the crypto branch of Fidelity Investments, released a report last week showing why Bitcoin demand will increase over time. Some reasons why mentioned are as follows:

  • There has been record monetary stimulus.
  • Deglobalization could spur inflation.
  • Paul Tudor Jones and others are acknowledging Bitcoin.
  • The world is experiencing a “great wealth transfer” from baby boomers to those of younger generations.

The simultaneous confluence of a decreasing supply of and an increasing demand for BTC should cause the cryptocurrency to increase in value.

Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
This Bitcoin Metric Just Dropped 4%—And It's Bullish For The Market

How useful was this post?

Click on a star to rate it!

As you found this post useful...

Follow us on social media!

0 Comments
Inline Feedbacks
View all comments

Related Crypto News

The great unbanking: How DeFi is completing the job Bitcoin started
While most of us will prefer to forget the horrors of 2020, DeFi may well prove to be the...
US Banks Can Now Hold Reserves for Stablecoin Issuers, Says Federal Banking Regulator
The U.S. Office of the Comptroller of the Currency (OCC) on Monday published a letter clarifying that national banks...
Equilibrium receives Web3 grant to develop its universal DeFi module
Web3 Foundation has an established history of offering grants of up to $100,000 for groundbreaking technologies. Decentralized finance startup...
Earth needs Bitcoin as economy hits ‘debt saturation point’ — Keiser
Earth is reaching a historic “inflection point,” Keiser warns after Singapore’s central bank admits that more debt is not...
Global Hashpower Exchange Launches World’s First Exchange Dedicated to Hashpower Futures – GHPEX.com
September 22, 2020 – Global Hash Power Exchange today announced the launch of GHPEX.com, the world’s first crypto exchange...
Canada’s first regulated crypto exchange Wealthsimple Crypto goes live
Winklevoss brothers-founded Gemini powers the first regulated crypto exchange in Canada. Wealthsimple Crypto, the first regulated cryptocurrency exchange in...

Featured Crypto News

This On-Chain Indicator Looks As It Did Prior to Bitcoin’s 2017 Rally
On a macro scale, Bitcoin has yet to break out. Despite surging around 20% in the past 1.5 months,...
Daily Ethereum transactions hit a new historical high amid DeFi boom
The previous all-time high in daily transactions was recorded in 2018. Daily transactions on the Ethereum blockchain have just...
Ripple (XRP) Above 100 SMA Signals Fresh Increase: The Big Picture
Ripple is slowly moving into a positive zone above the $0.2480 support zone against the US Dollar. XRP price...
Technicals Suggest Bitcoin Looks Ready For Another Leg Higher Over $11K
Bitcoin price corrected lower, but it found support near the $10,750 zone against the US Dollar. BTC is currently...
Tether market cap increases almost 4X in 2020 to $15 billion
Tether supply surges to $15 billion but it could still be a house of cards The surging DeFi sector...
Scarily Accurate Analyst Thinks Bitcoin Will Hold $10,000, Triggering Strong Growth
Bitcoin has flirted with falling under $10,000 multiple times over the past week. If you take a look at...