Bitcoin BTC
+5.77%
centralized exchange depositing addresses are at their lowest level since 2016 which could indicate a reduction in selling pressure.
The number of bitcoin exchange depositing addresses has dropped to 132,100, a multi-year low, according to a recent CryptoQuant research note. This metric represents the number of addresses sending inflow transactions to exchanges, and the analysis suggests that a multi-year low indicates a decrease in the number of investors selling coins on spot exchanges, potentially pointing to a reduction in selling pressure.
"In general, seeing lower deposits into exchanges could lower selling pressure as there is less bitcoin available to sell," CryptoQuant Head of Research Julio Moreno told The Block.
A fall in the number of bitcoin exchange depositing addresses could lead to a lessening of sell pressure for the digital asset. Image: CryptoQuant.
However, Moreno added that when fewer deposits are being made into exchanges, it might not just indicate that people are less interested in selling their bitcoin. It could also mean there is less demand for bitcoin overall, because fewer traders are making deposits to bet on price increases.
"Some traders deposit into derivative exchanges to open long positions, betting on higher prices, in this regard, lower deposits could also signal less demand for bitcoin," he said.
RELATED INDICES
Bitcoin exchange reserves on centralized exchanges have fallen by over 15% since the beginning of the year. Image: CryptoQuant.
Another metric has also shown a month-on-month reduction in the liquid supply of bitcoin on centralized exchanges. According to CryptoQuant data, there are around 470,000 fewer bitcoin on centralized exchanges than at the beginning of this year, a fall of around 15% from January until September.
This trend is reducing the liquid supply of bitcoin and could suggest that investors are withdrawing their coins as part of a long-term holding strategy.
The bitcoin price increased by around 5% in the past 24 hours and was changing hands for $61,019 at 11:38 a.m. ET, according to The Block's Price Page.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
