Bitcoin deposits on exchange wallets have plummeted in recent days.
The amount of daily inflow of #Bitcoin to known exchange wallets, as well as the total supply of $BTC on exchanges, have experienced a sharp 50-day drop, which may point to diminishing sell-side pressure. Read our take on the state of the markets here. https://t.co/WP37e4nrar pic.twitter.com/Fj0V77JU59
— Santiment (@santimentfeed) July 12, 2021
This is reported by Santiment, which shows a graph from which it is clear that the drop began more or less at the beginning of July.
In particular, there has been a relatively steady decline in the overall supply of BTC on known exchange wallets for about 50 days, since the flash crash of 19 May.
For Santiment, this could indicate a decrease in the ongoing selling pressure of bitcoin.
Perhaps the most interesting element in the chart is the collapse of the deposit curve (the purple one) since early July.
Yesterday’s level of bitcoin deposits on exchanges (2,255 BTC) is by far the lowest of all 2021, plummeting from, for example, 18,900 BTC at the end of June.
Thus, at the same time, an annual minimum was reached for this parameter, due to a real collapse in recent days.
This is a real anomaly compared to everything else that has happened so far in this 2021, and probably suggests quite clearly that there may be a real relaxation of selling pressure taking place.
The reasons for the collapse of bitcoin deposits on exchange wallets
Typically those who deposit BTC from a wallet outside of an exchange do so in order to sell them, i.e. with the specific goal of disposing of them. As these deposits plummet, it clearly means that few people are planning to dispose of their bitcoin in the short term.
When combined with the continued accumulation of BTC by whales, the picture that emerges is one of a relaxation of selling pressure not accompanied by an equivalent relaxation of buying pressure.
However, it is also worth noting that the still very low volumes could also suggest a general reduction in activity and transactions on the crypto markets, which could also justify the reduction in deposits without calling into question the reduction in selling pressure.
Indeed, the price of bitcoin continues to remain relatively constant, more or less stable in the area between $33,000 and $34,000.
However, should volumes and buying pressure increase sharply, such a low supply of bitcoin on exchanges could drive up the price. This has not yet occurred, probably due to low volumes not being able to significantly increase buying pressure.