Bitcoin balance on exchanges continues to go down as long-term investors keep stacking. It recently hit a 3-year low which is a bullish scenario for this bull run. The current number of Bitcoins available on exchanges is 2,408,237. It will be important to see whether the number declines more or we see a spike from here on like the last time. In the May price crash, we saw an increase in exchange supply, but this time, there was nothing as such.
The May sell-off
An increase in the number of Bitcoin on exchanges is bearish. This is because long-term holders and even short terms traders who hold a high number of Bitcoins prefer using a hardware wallet for safety. So, the inflow in exchanges only happens when these investors plan to sell. A very good example of this happened a few months back. According to the data provided by Glassnode, during the May crash, around 5,149 Bitcoins were deposited on exchanges every day.
This is why the correction was so big as the supply increased by a huge margin. In the March 2020 crash as well, we can clearly see the spike in the number of Bitcoins on exchanges. All this points to one thing: long-term investors are increasing in the space, and we are not forming a bubble. Though the exchange supply doesn’t completely justify this, it can be cleared by the stagnant supply of coins in large wallets. These whales aren’t selling, and even if they are, they buy back at lower prices.
Bitcoin has a very low short-term investment incentive due to the volatility. This is why I think long-term investors are going to stay the way they are. What are your thoughts on Bitcoin balance on exchanges hitting a 3-year low? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Financial Advisor warns that crypto is a bubble.