On August 3rd, the “all exchanges reserve” metric on CryptoQuant printed a decline of approximately 4% from 2.49 million to 2.39 million coins.
Garner sees this as a positive sign for Bitcoin, arguing that the metric suggests “whales bought the sell off”
“The amount of #Bitcoin held on exchanges just dropped off a cliff. It happened two days ago – whales bought up the selloff. $BTC flowing out of exchanges is *bullish*”
CryptoQuant provided a slightly different explanation, writing to Garner on his Twitter:
“68101 BTC transferred from Binance to a newly created wallet, and not clear whether it’s their new cold wallet or the 3rd party custody. Even if it’s Binance’s, it could be a bull signal since Binance decided to reduce the portion of hot wallets in charge of user withdrawals.”
Underscoring this decrease in the market supply of Bitcoin are the creation and propagation of many demand catalysts.
Fidelity Digital Assets, the crypto branch of Fidelity Investments, released a report last week showing why Bitcoin demand will increase over time. Some reasons why mentioned are as follows:
The simultaneous confluence of a decreasing supply of and an increasing demand for BTC should cause the cryptocurrency to increase in value.
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