Bitcoin’s exchange supply has hit a seven-year low, dropping to 2.488 million BTC last Friday and slightly rising to 2.492 million BTC over the weekend. This marks the lowest level since October 2018, as reported by CryptoQuant. CoinShares data shows that Bitcoin funds experienced a $3.2 billion inflow for the week ending April 28. The decrease in exchange reserves coupled with the increase in fund inflows indicates a potential new accumulation phase. Interestingly, retail investors have notably contributed to the recent price surge, with the ‘exchange whale ratio’ dropping from 0.512 to 0.36 between April 17 and April 27.
What This Means for Bitcoin
The dwindling supply of Bitcoin on exchanges suggests a shift towards long-term holding strategies, potentially driving up prices due to reduced selling pressure. The increased fund inflows also indicate growing institutional interest, further supporting Bitcoin’s bullish outlook.
The Impact on Price and Market Dynamics
With fewer Bitcoins available for trading, the market may experience increased volatility as supply constraints amplify price movements. This scarcity could lead to higher price levels if demand continues to rise, potentially pushing Bitcoin to test new resistance levels.
Is it Time to Buy Bitcoin?
Given the current supply dynamics and institutional support, investing in Bitcoin at this stage could present a compelling opportunity for long-term gains. However, as the market remains volatile, it’s crucial to assess personal risk tolerance and investment goals before making any decisions.
Will Bitcoin recover, or is this just the start of a bigger crash? Share your thoughts below!
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