Bitcoin supply on exchanges hits a seven-year low, signaling potential bullish momentum for the digital currency.
According to data from CryptoQuant, only 1,918,417 BTC are currently available on major trading platforms, marking a notable decrease from the previous year.
Thomas Fahrer, co-founder of Apollo, recently highlighted this development in a post on the social media platform X.
He pointed out that the dwindling BTC reserves on exchanges could indicate an imminent price rally, especially with the expected influx of Exchange-Traded Fund (ETF) flows.
He emphasized that current low level of bitcoin on exchanges might trigger a parabolic price surge driven by a combination of “demand shock + inelastic supply.”
This sentiment is echoed by many investors who interpret the shrinking exchange supplies as a strong bullish signal.
The reduction in BTC on exchanges suggests that a significant number of investors are moving their holdings off trading platforms. They opt instead to store them long-term in self custody in anticipation of future price increases, indicating a growing confidence in the long-term value of bitcoin.
13F filings with the SEC shows institutional investors, including hedge funds and public pension funds, are increasingly turning to Bitcoin, further fueling the wave of ETF inflows. Farside Investors reported approximately $950 million of inflows into Bitcoin ETFs last week, a figure not seen since March.
The bullish sentiment surrounding bitcoin is further supported by recent price movements. Bitcoin’s price recently surged past the $70,000 mark, with a positive Relative Strength Index (RSI) indicating a higher likelihood of an upward breakout.
The price overcoming the $68,000 resistance level suggests a potential smooth path towards previous all-time high (ATH) of $73,777.
Analyst ELI5 of TLDR has noted that most on-chain indicators are pointing towards a nascent bull market, despite some indicators showing topping patterns.
The unprecedented low bitcoin reserves on exchanges, combined with increasing institutional interest, paint a bullish outlook for bitcoin. Investors are closely watching to see if the digital asset will soon achieve a new ATH. Analyst Willy Woo comments:
“After a break of ATH, price is expected to move violently relative to capital inflows, driving up risk. That’s where most of the fast gains happen.”
