Bitcoin’s Historic Low Available Supply Reflects “Investor Risk”

The value of Bitcoin (BTC)  is making headlines amid low available supply. Despite a surge in the market price, the aggregate open interest (OI) on perpetual exchanges reporting a surprising decline is predicted to be risky.  Speaking of the current status, there is a significant reduction in the supply of Bitcoin which has now reached unprecedented levels in its history.

The latest report from Glassnode showed that ‘available supply’ is at a historic low, and ‘supply storage’ rates are 2.4x higher than current issuance.

Bitcoin’s Price Rise Belies Market Skepticism

Historically, a rise in the price of Bitcoin has often been accompanied by an increase in open interest on perpetual exchanges, as traders and investors typically enter into futures contracts to speculate on or hedge against future price movements. However, the current scenario defies this pattern. The aggregate OI is lower than when Bitcoin was trading at $25,000 and lower than its previous levels when Bitcoin’s value stood at the current price point.

This unusual market behavior has left many investors puzzled. Despite the significant price rise, the lower open interest suggests a lack of new money entering the futures market, possibly indicating a cautious or bearish sentiment among traders.

Contrary to the market’s current optimism reflected in Bitcoin’s price, some market participants continue to express skepticism. Predictions of Bitcoin falling back to 20,000, 25,000, or even below $30,000 are still prevalent among a section of analysts. These predictions stem from concerns over regulatory developments, macroeconomic factors, and the inherent volatility of cryptocurrency markets.

At the time of this report, Bitcoin (BTC) is exhibiting bearish tendencies, having decreased by 0.94% to trade at $36,691.54. Interestingly, its trading volume has a noticeable 37.7% rise, reaching $18,097,704,817. This surge in trading volume indicates a potential continuation of the current bullish sentiment in the market in the coming hours. Moreover, bulls have successfully set a support level at $36,225.58 and a resistance level at $37,055.90.

BTC Technical Indicators 

The 24-hour price chart for Bitcoin (BTC) shows a bullish sentiment, as evidenced by the Relative Strength Index (RSI) moving above its signal line. This movement suggests that the bullish trend could persist in the upcoming hours. Currently, the RSI stands at 79.83, reinforcing this optimistic outlook.

Bitcoin Price chart

However, the Moving Average Convergence Divergence (MACD) indicates a potential bearish trend in the coming hours, as the MACD line is moving below its signal line. The trajectory histograms also show a bearish trend, having formed on the southward side, further suggesting a potential downward movement in the near future.