Exchange Bitcoin Supply Tightening: A New Bull Run Coming?
Over the past few months, Bitcoin’s exchange reserves have been trending downward, a phenomenon that typically signals a reduction in selling pressure.
When investors move Bitcoin to cold storage, the available supply on exchanges becomes limited, leading to tight supply in the market. This shift in supply dynamics is often seen as a positive, indicating that investors are holding Bitcoin in the hope of future price increases.
In contrast to the decline in Bitcoin reserves, Tariq highlighted that exchanges’ stablecoin reserves are also increasing.
Notably, stablecoins such as USDT and USDC are widely used to store value during periods of market uncertainty, allowing traders to quickly deploy capital when the right opportunity arises.
The increase in stablecoin reserves suggests that market participants are preparing for potential entry points, which further strengthens Bitcoin’s bullish outlook.
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Despite the bullish data on the Bitcoin chain, the asset still has difficulty breaking through the psychological price level of $60,000.
So far, BTC has fallen by 1.6% in the past day and 2.3% in the past week. Its price has fallen below $57,000 again, trading at $56,047 at the time of writing.
Interestingly, despite the continued decline in BTC's price, the asset's daily trading volume seems to be showing the opposite trend, rising from below $15 billion last week to above $34 billion.
