Bitcoin Exchange Supply Drops to 6-Year Low, Will BTC Price Rally?

After a recent bounce earlier this week on Wednesday, August 23, the Bitcoin (BTC) price has entered a sharp retracement and moved back once again closer to $26,000. While the sentiment around Bitcoin remains largely bearish, on-chain data provides some optimism to investors.
The Bitcoin supply at the exchanges has dropped to a 6-year low. Only a small portion, about 5.8%, of the total Bitcoin supply is currently held on exchanges. This marks the lowest level for the top cryptocurrency by market cap since December 17, 2017. Furthermore, there are consistent instances of significant whale transactions involving $BTC, averaging around 57.4K per week, reports Santiment.
As Exchange Reserves decrease during a market downturn, it suggests that investors are opting to hold onto their assets for potential future profits instead of selling. If this trend continues, it could lead to a substantial price increase for Bitcoin when favorable macroeconomic factors and a positive global crypto market sentiment return.
Another positive indicator is that Bitcoin whales have been accumulating recently after last week’s market crash. Since last week’s fall to $25,000, Bitcoin whales have accumulated over $300 million worth of Bitcoins so far.
#Bitcoin | Whales seem to be buying the #BTC dip. We're seeing a spike in addresses holding 1,000+ $BTC. pic.twitter.com/TXec7s8a2q
— Ali (@ali_charts) August 24, 2023
Where’s Bitcoin Moving Next? All eyes on the Fed
On the technical charts, Bitcoin continues to show weakness as it has already dropped under the 200-day moving average. For now, the immediate support zone for Bitcoin stands at $25,200-$24,800. However, breaching this could see the BTC price fall further to $20,500.
All eyes are currently on the Fed’s Jackson Hole meeting later today on Friday. U.S. Federal Reserve Chair Jerome Powell will shed light on whether or not they would be ending the interest rate hike cycle.
On the other hand, the US regulatory action on crypto firms has further dampened market sentiments. Amid the SEC action, Bitstamp decided to discontinue the Ether staking facility for US customers from next month onwards.
The cryptocurrency market might face ongoing pressure from negative sentiment in the upcoming weeks or months until there is a clear regulatory and legislative framework that governs the cryptocurrency market.
- FG Nexus to Tokenize Stock on Ethereum as SEC Weighs 24/7 Onchain Stock Trading
- Bitcoin Still Undervalued, JPMorgan Forecasts Rally to $165,000
- Breaking: CME to Launch 24/7 Crypto Futures Trading Amid Rising Institutional Demand
- Citigroup Predicts Bitcoin Could Climb to $231,000 in 12 Months
- Ethereum and BMNR Rallies as BitMine Drops $1B on ETH, Analyst Hails “Most Bullish Setup Yet”
- Pi Network Price at Risk of Another Crash as Mysterious Whale Stops Buying
- Solana Price Eyes $360 After Bullish Retest As VisionSys AI Deploys $2B Treasury Strategy
- Cardano Price Forecast As Hashdex Listing Fuels Optimism For $1.27 Breakout
- BONK Price Rally Ahead? Open Interest Jumps as TD Buy Signal Flashes
- Shiba Inu Price to Surge as Whales Buy and Team Commits to Shibarium Growth
- XRP Price Prediction After Ripple CTO David Schwartz Resigns