Analyst Says “Only A Matter Of Time” Before Bitcoin Flies Past ATH
May 24 2024 - 12:00AM
NEWSBTC
An analyst explained how Bitcoin’s availability for trading has
quietly declined during the asset’s recent consolidation phase.
Bitcoin May Be In A Good Position To Set New All-Time Highs In a
new post on X, analyst Willy Woo discusses the recent trend in the
Bitcoin inventory sitting on centralized exchange platforms.
Related Reading: Is $77,600 The Next Step For Bitcoin? On-Chain
Pricing Model Hints So The chart below shows how the spot and paper
BTC reserves have changed over the past few years. As the graph
shows, the Bitcoin sitting in spot wallets has been declining over
the last couple of months. The total amount of such BTC in the
custody of central entities has now dropped to just 2.3 million.
It’s also apparent that the total sum of the spot and “paper” BTC
(highlighted in purple) has declined at the same time. Paper BTC
here refers to derivatives products related to cryptocurrency that
don’t actually require investors to own the asset. Thus, given
that the combined sum of the exchange inventory has gone down for
the cryptocurrency, it would appear that the decrease in the spot
BTC isn’t because paper BTC has replaced it. Generally, the supply
of exchanges is considered part of the Bitcoin supply, which is
“available” for trading. As such, due to how supply-demand dynamics
work, less of this available supply may be a constructive sign for
the cryptocurrency. From the graph, it’s visible that this decline
in the exchange inventory has come during a period where the price
of the cryptocurrency has struggled after setting a new all-time
high (ATH). As Woo notes, While everyone was freaking out that
Bitcoin price was not rising the last 2 months, available BTC
was quietly being scooped up, and importantly without paper BTC
printed in its place. Thus, the fact that the available supply has
gone down during such a period could be a bullish sign for the
coin. “It’s only a matter of time before BTC squeezes past all-time
highs,” says the analyst. Related Reading: Ethereum Whales Come
Alive: Are They Buying Or Selling? In another X post, Woo also
discussed how capital inflows into Bitcoin have just started to
pick up again after registering a steep drop earlier. As the chart
shows, network inflows spiked alongside the all-time high, but they
observed a major slowdown in the consolidation that followed. The
inflows from spot exchange-traded funds (ETFs), highlighted in
light green, also disappeared earlier, but they have now made a
comeback alongside these fresh capital inflows. BTC Price Bitcoin
had recovered as high as $71,000 earlier but appears to have
slipped off over the last few days as it has now returned below the
$68,000 level. Featured image from Shutterstock.com, woocharts.com,
chart from TradingView.com
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