The supply of Bitcoin (BTC), which is traded on exchanges, is decreasing despite the fact that its price continues to fluctuate. BTC supply on exchanges was at its lowest level in 31 months, as of December 13th.
According to Santiment, exchange supply only accounted 11.96% for total asset supply. The crypto data analyzing platform sees the scarcity of BTC supply as an investment boon. It offsets any potential sell-offs. As Santiment put it:
“Prices have been volatile in recent months, but the absence of BTC moving to exchanges at this time is a positive indicator that there should be limited selloff risk.”
The supply of Bitcoin on exchanges can be seen as an indicator of overall network activity. It can also indicate where BTC is headed in the near and medium term.
BTC’s recent fall below $50K price point reveals that there has been a lot of whale accumulation. This is primarily to take advantage of any price rise that may be possible due to the limited supply. This behavior, dubbed HODLing (Hot Investing Daily), also protects investors from short-term price fluctuations.
At the time of writing, BTC was trading at less than $49K
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