On-chain data shows that the Bitcoin supply on exchanges has continued to go down despite the crash, and has now hit a multi-year low of 13.27%.
Percentage of Bitcoin Supply On Exchanges Sinks To Multi-Year Low
As per the latest weekly report from Glassnode, the percentage of the BTC supply on exchanges has now declined to a multi-year low of around 13.27%.
The “percentage of supply on exchanges” is an indicator that measures the percent of the total circulating Bitcoin supply that’s currently stored in exchange wallets.
When the value of this indictor goes up, it means the amount of coins held by exchanges is going up. This trend can be bearish for the price of the crypto as investors usually deposit their BTC to exchanges for selling purposes.
On the other hand, when the metric moves down, it implies holders are withdrawing their coins from exchanges, thus reducing their reserve.
Such a trend may be bullish for Bitcoin as the supply on exchanges is usually considered the selling supply, and it going down would mean there is lesser sell pressure in the market.
Related Reading | Why Bitcoin Could Hit $90K By The End Of 2022, According To This Prediction
Now, here is a chart that shows the trend in the percentage of BTC supply on exchanges over the past year:
Looks like the value of the indicator has been on a downtrend for a while now | Source: The Glassnode Week Onchain - Week 5, 2022
As you can see in the above graph, the percentage of the Bitcoin supply on exchanges has now hit a multi-year low of 13.27%.
It seems like the indicator has continued on a downtrend despite the struggling price of the crypto recently. Since the all-time high in November, the metric has decreased by about 0.28% as 42.9k BTC has exited exchanges during the period.
Related Reading | This Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Be Near
This trend has been different from what happened following the crash in May of last year. There, the exchange supply rose up and sustained at high values for a while until the price started moving back up again.
The current reducing exchange supply shows investors may be in a state of accumulation, which could be bullish for the price of Bitcoin in the long term.
At the time of writing, Bitcoin’s price floats around $38.5k, up 6% in the last seven days. Over the past month, the crypto has lost 17% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to have held steady above the $38k price mark in the last few days | Source: BTCUSD on TradingView
Featured image from Unspash.com, charts from TradingView.com, Glassnode.com