The cryptocurrency market is looking for a new run. Leading cryptocurrency Bitcoin moved in the green zone and reached the 37 thousand dollar mark. With a few exceptions, most altcoins also have bullish momentum. Meanwhile, a Turkish on-chain analyst states that stablecoins are piling up on the exchanges. On the other hand, CryptoQuant data shows that the Bitcoin supply on exchanges is decreasing. So what do these mean?
Stablecoins are piling up on crypto exchanges, how will it affect the market?
cryptokoin.comAs you follow from , the market entered the weekend in a pessimistic mood. However, today he is trying to shake it off. Altcoins such as Solana and Avalanche, which attracted attention with their strong performances, started to rise again after a retreat. In the midst of these developments, stablecoin transfers have been made to exchanges since last night, according to on-chain data analyst Kriptolik, which has a wide following in X. Kriptolik shares this development with a CryptoQuant chart and makes the following assessment:
There have been stablecoin inflows to spot crypto exchanges since midnight. Stablecoins that enter the spot are used only for purchasing purposes, unless they are withdrawn to cold wallets or derivative exchanges. It would be better if this data is maintained. Although the inflows are not very high, the accumulation of stablecoins in spot exchanges is promising for now.
Fasten your seatbelts: Bitcoin exchange reserves are falling!
In contrast to the flow of stablecoins to exchanges, there is a decrease in Bitcoin supply. A 10-year historical trend for Bitcoin (BTC) exchange reserves has changed. Over the last three years, investors have been withdrawing more Bitcoin than they have deposited into cryptocurrency exchanges. It is important to understand that BTC deposited on an exchange may turn into selling pressure at any time. This speculative supply neutralizes incoming speculative demand, leading to the threat of an imminent sell-off that could negatively impact BTC price movement. Moreover, when holders deposit their coins on an exchange, this is often an indication of intent to sell. On the other hand, withdrawing funds to a self-custody Bitcoin wallet indicates the opposite. So: “HODL” intention.
Notably, from 2013 to 2020, Bitcoin exchange reserves have steadily increased as investors and miners deposited more and more BTC to trade or sell. However, a chart from CryptoQuant shows the trend change that has occurred since the end of 2020.
How many Bitcoins are in the exchange reserves?
At the time of this writing, the exchange has approximately 2.04 million BTC ($73.3 billion) in reserves. This number still represents more than 10% of Bitcoin’s current circulating supply. This is a highly weighted speculative offering. However, it also means that Bitcoin exchange reserves have decreased by 32% since their peak of around 3 million BTC held by exchanges in 2020.
Even though it has one of the highest amounts of speculative supply historically, BTC managed to reach its all-time high price in 2021 due to significantly higher speculative demand for the leading cryptocurrency. Interestingly, the lower the amount of Bitcoin in exchange reserves, the lower the demand will be required to trigger a bull market similar to two years ago. It also means less risk of exposure to custody disasters like the one with FTX in 2022.
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