The total supply of Bitcoin (BTC) circulating on all cryptocurrency exchanges can give us an idea about the future of the price. According to a new analysis by Cryptorank, the circulating supply of Bitcoin is declining rapidly. How should this shortage in stock markets be interpreted?
Amount of Bitcoin (BTC) on Exchanges!
According to a new analysis by Cryptorank, 6.3% of the total Bitcoin supply remains in exchange wallets. Bitcoin (BTC) supply has dropped to levels not seen in years. In a recent tweet by CryptoRank, only 6.3% of the total Bitcoin supply, or 1.3 million BTC, is held on cryptocurrency exchanges.
The dwindling supply is nothing new, it has been on a downward trend since the Bitcoin halving in 2020, when the BTC block reward halved. BTC availability on exchanges has followed the same, slowly trending downwards over the past year. The supply in the stock markets, which fell to 9.5% in October 2020, saw 7.3% in July. Today, it made an important bottom with 6.3%.
Interestingly, Coinbase’s BTC wallet dominance is also declining. The American exchange was holding more BTC than all other exchanges combined. His dominance fell from 50.52% to 40.65% in the past year.
When Will Bitcoin Hit $120,000?
The news follows a series of positive price metrics supporting Bitcoin’s upward move. More Bitcoin now goes to cold wallets than miners produce. On-chain analytics firm Glassnode has shared more bullish news on stock market behavior. The seven-day moving average for BTC’s inflow volume has reached a 5-month low of 978,452 BTC and is trending downwards every week. The stock market shortage may continue as less and less BTC is sent to exchanges.
Some of the investors still keep their Bitcoins on the exchanges. Considering that long-term investments are also within this 6.3%, we can think less about the amount of Bitcoin actively in circulation. As a result, while 1.3 million BTC are on exchanges, they may not be “circulating” and actually contribute to the illiquid supply.
Still, despite the calls for a “Santa Rally” behind bullish analytics, the bears haven’t given up yet. A tweet by BullRun Invest using Glassnode data shows that 24.6% of the entire BTC supply averages $47,000.
Many analysts expect a strong rally for the first quarter of next year. Judging by the latest assessments shared by PlanB, the price could push the $120,000 levels by March.