According to analysts at Bitfinex, Bitcoin and its recent activity on the stock exchanges reflects a pattern reminiscent of December 2020, indicating a possible growth phase.
The last of the fair report signals a significant decline in the supply of Bitcoin held by long-term investors on centralized exchanges, reaching an 18-month low.
This trend, combined with the upcoming halving, points to a scenario conducive to further price appreciation, as indicated by the analysts.
Potential growth on the horizon
The Bitfinex Alpha report highlights Bitcoin’s declining idle supply, especially assets that have been stagnant for more than a year. This reduction means that long-term holders will either reduce their positions or transfer their assets from the exchanges.
Such actions are fundamental to understanding Bitcoin price dynamics, especially as the halving approaches.
With an increasing number of BTC leaving centralized exchanges and idle supply dwindling, the market is primed for “potential growth,” according to Bitfinex analysts. They add that this reflects conditions observed before the significant market surge in December 2020.
On a broader scale facts from CryptoQuant confirms Bitfinex’s observations, pointing to a continued decline in Bitcoin exchange reserves since July 2021. This decline, with reserves falling from 2.8 million to approximately 1.94 million, indicates a continued trend of Bitcoin becoming the exchange portfolios.
Bitcoin latest price action
Meanwhile, Bitcoin’s price performance has undergone a downturn, which notably started late last Friday and lasted throughout the weekend. The top crypto witnessed a significant drop, from above $70,000 to $62,000.
Notably, this downward trend has continued over the past 24 hours, with the asset down 4.6% over this period and over 10% over the past week, leading to its current trading price of $62,034 at the time of writing.
Amid these price movements, signs of panic have emerged in the Bitcoin market. Recent data from Whale Alert sheds light on a significant transfer of 7,690 BTC, worth $483 million, to Coinbase, the largest cryptocurrency exchange in the United States.
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 7,690 #BTC (483,425,557 USD) transferred from unknown wallet to Coinbase Institutionalhttps://t.co/olrmzaQdHx
— Whale Alert (@whale_alert) April 16, 2024
While details about the origin of the “1Eob1” address are not made public, it is important to recognize that such transfers to exchanges often indicate potential intentions to liquidate holdings. This event typically signals a willingness to sell assets within the crypto sphere.
Furthermore, should the entity responsible for this transfer decide to sell the entire deposited BTC, this could potentially have a notable impact on the broader Bitcoin market.
Featured image from Unsplash, chart from TradingView
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