Bitcoin (BTC) Supply At Exchanges Highest In Nine Months, Moment of Caution?

By Bhushan Akolkar
Published January 10, 2021 Updated January 10, 2021
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Bitcoin (BTC) Supply At Exchanges Highest In Nine Months, Moment of Caution?

By Bhushan Akolkar
Published January 10, 2021 Updated January 10, 2021

Bitcoin (BTC) price has jumped more than 30% so far in 2021 and is currently making yet another attempt to breach $41,000 levels. At press time, Bitcoin (BTC) is trading at $40,815 with a market cap of $759 billion. The recent BTC price rally has made investors anxious about what’s to come next as Bitcoin enters “Price Discovery Mode”.

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Amid the ongoing battle among the BTC whales, the BTC spot trading volumes at exchanges have surged to record highs. As per data on Skew analytics, the aggregated daily trading volumes on spot exchanges jumped to a record $5 billion on Friday, January 8.

On the other hand, following few weeks of BTC liquidity crunch, the ratio of BTC supply sitting on exchanges has reached a nine-month high as per on-chain data provider Santiment. This suggests that there might be chances of major sell-off in recent times.

Courtesy: Santiment

However, BTC price has shown a resistance to correction as “mega whales” with over $1M in BTC holdings have been buying massively since the beginning of 2021. Also, market analysts and veterans are currently throwing mixed responses to how the BTC price can move from here.

Market Analysts Remain Divided on Bitcoin (BTC) Price Movement

While some of the market analysts have already forecasted a $100,000 price prediction for Bitcoin (BTC), looking at the historical patterns, BTC might show some volatility ahead.  Wall Street’s popular value investor Bill Miller has been heavily backing BTC in recent times. during his recent interview with CNBC, the mutual fund titan said:

“One of the things that’s interesting about bitcoin is that it gets less risky the higher it goes. That’s the opposite of what happens with most stocks.”

On the other hand, Fundstrat analyst Tom Lee thinks that BTC price can correct 50% from the current levels. Speaking to Yahoo Finance, Lee said:

“That’s a pretty typical correction for crypto. In fact, I think last year it had a couple of drawdowns nearly that size. If it looks like 2017, I think bitcoin will be up at least 300%,” he said. “I don’t think it’s straight up with a ruler, it’s going to be pretty jagged but at the end of the year, bitcoin is much higher.”

Another popular on-chain analyst Will Woo states that it’s still not late to buy Bitcoin (BTC) at these levels. Bitcoin has outperformed all other asset classes since its inception with its risk-adjustment returns staying at higher levels.

Also, the Biden administration is set to take charge 10 days from now. Thus, there are high chances that there might be additional fiscal stimulus coming. In this case, the stock market and BTC can rally further.

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan Akolkar
717 Articles
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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