Benzinga - by Murtuza Merchant, Benzinga Staff Writer.
Bitcoin’s availability on major cryptocurrency exchanges has dwindled to its lowest point ever, according to data analysis firm CryptoQuant.
What Happened: Over 90,000 bitcoin have been withdrawn in the past month alone, suggesting a growing trend of investors holding onto their coins for the long term, The Block reported.
This movement of Bitcoin from exchanges, often referred to as “cold storage,” has been ongoing for several years and may be fueled by a combination of factors, including rising Bitcoin prices, the potential approval of exchange-traded funds (ETFs) directly tied to Bitcoin and the upcoming Bitcoin halving event, which reduces the number of new Bitcoin mined.
CryptoQuant’s data, dating back to early 2021, shows a significant decline in Bitcoin exchange reserves.
In July 2021, reserves sat around 2.8 million coins.
Today, that number has dropped by roughly 900,000.
However, while the overall trend points towards long-term holding, on-chain analysis platform Glassnode reveals a different dynamic within the remaining exchange-traded Bitcoin.
Their data suggests a recent shift, with long-term holders moving coins to short-term holders.
“There’s been a historical tightness in supply, but lately we’re seeing a gap close between long-term and short-term holder supply,” explains a recent Glassnode report.
Also Read: Bitcoin In ‘The Danger Zone,’ Says Trader Who Targets 22% Drawdown
“As prices rise and investors see unrealized profits grow, it becomes more tempting for long-term holders to sell some of their holdings.”
The report further indicates that short-term holder supply has increased by roughly 1.121 million Bitcoin, potentially absorbing the selling pressure from long-term holders.
Understanding the motivations of different investor groups is crucial in navigating the cryptocurrency market.
While the overall trend suggests long-term confidence in Bitcoin, the recent shift within exchange-traded coins indicates potential short-term volatility.
What’s Next: Benzinga’s upcoming Future of Digital Assets conference on Nov. 19 promises to be a valuable platform for in-depth discussions on Bitcoin’s price drivers.
Read Next: Ripple Announces Stablecoin On XRP Ledger And Ethereum
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