Bitcoin [BTC] Yes, supply on exchanges is at a 4-year low, but there’s more

During the Oct. 18 intraday trading session, the leading coin was Bitcoin [BTC]saw a spike in activity on various exchanges, data from Santiment showed.

According to the blockchain analysis platform, BTC has seen a significant increase in the number of coins delisted from exchanges and a sustained decline in the supply of assets on exchanges.

On Oct. 18, King Coin saw its largest off-exchange net outflow of coins since June 18, with a daily amount of 40,572 BTC. Additionally, the leading coin’s supply on exchanges fell to a 4-year low of 8.48% on the same day.

👌 #Bitcoin saw a massive spike in coins delisting yesterday, the largest daily amount ($40,572 BTC) in 4 months. Coin supply on exchanges has dropped to 8.48%. When exchange supply decreases, it reduces the chances of a future sell-off. https://t.co/gi4ki39Z6T pic.twitter.com/OKtdS6RUJY

— Santiment (@santimentfeed) October 19, 2022

Typically, a decrease in the supply of an asset on exchanges indicates a decrease in selling pressure. Also confirmed by Santiment: “If the exchange supply decreases, it reduces the chances of a future sell-off.”

What are other metrics telling us about the possible price direction of the leading asset in the short term?

Know this and experience peace

In most cases, the intensity of whale populations determines the direction in which an asset’s price would go. Regarding BTC, holders of various amounts of the coin have been increasing their holdings over the past few months, data from Santiment showed.

Since April, the number of whales holding 10 to 100 BTC has increased by 3%. For holders of 100-1000 BTC and 10,000-100,000 BTC, their numbers have also increased by 0.2% and 16%, respectively, over the same period.

A sustained rally in these indices can help push the price of the leading coin higher.

Source: Santiment

For a sustained price rally to take place, BTC, which is dormant in wallet addresses, needs to do something. A look at the asset’s Mean Coin Age metric showed that older coins hadn’t changed hands in a while.

On a 180-day moving average, BTC’s median coin age was in an uptrend at 78.422. In order to see greater price growth, this metric needs to assume a downtrend as that would mean increased movement of BTC between addresses.

This position was confirmed by a 180-day moving average valuation of BTC’s Median Invested Dollar Age (MDIA). At this point it was also in an uptrend at 1310.

Continuous upward movement indicates some stagnation in the BTC network; hence any major price move could be difficult.

Source: Santiment

It is also important to note that due to the ongoing decline in BTC price over the past few months, several holders have been expecting losses on their investments, data from Santiment showed.

A review of BTC’s MVRV on a 180-day moving average confirmed this. At the time of going to press, the indicator was at the -15.5% mark.

Before you make your next trade, note that negative bias against the asset has persisted for the past few months and may have a say in where the price goes next.

Source: Santiment

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