Declining Bitcoin balance on cryptocurrency exchanges has become a market-wide trend after the dramatic collapse of FTX.
Bitcoin supply begins to decline
The fall of Sam Bankman-Fried’s $32 billion crypto empire highlighted the importance of self-control for users. In fact, investors have already tended to hold their assets themselves rather than entrusting their hard-earned money to a third-party platform.
According to the latest data compiled by crypto analytics firm Santiment, Bitcoin’s supply on centralized crypto exchanges has dropped from 11.85% to 6.65% over the past year. The flagship crypto asset’s debut has been seen across the top six platforms, including Binance, Coinbase, Kraken, KuCoin, and Bitstamp.
https://twitter.com/santimentfeed/status/1615590094257127424
Kraken took the biggest hit as it saw a 59% reduction in its BTC balance, followed by Coinbase (33%), Bitfinex and KuCoin (32%), Binance (25%), and Bitstamp (23%). This trend marks a historic decline in the overall BTC supply and illustrates the growing interest in self-custody. Basically, the less Bitcoin there are on exchanges, the more investors see it as a long-term investment. As expected, it also means there is less immediate selling pressure.
Earlier this year, Bitcoin core developer Like Dashjr lost millions in an exploit after attackers allegedly managed to gain access to the PGP key, raising the risks associated with self-custody. Binance recently announced Mirror, a new feature based on Binance Custody, to enable institutional players to invest and trade using cold storage.
bull market cycle for bitcoin
Bitcoin price is trading strongly above the $20,000 psychological level. The five on-chain indicators also point to Bitcoin entering an early bull market cycle.
The crypto market has rebounded somewhat after the US DOJ’s sanctions action against Russian crypto exchange Bitzlato. Crypto Twitter accuses DOJ of creating too much hype about petty news causing panic selling in the crypto market.
On-chain indicators show further increase
According to on-chain data from CryptoQuant, the Bitcoin price has entered an early bull market cycle and will likely rise higher in the next few days with promising momentum.
Bitcoin movements from spot to derivative exchanges increased as investors began to take risks. Traders often transfer their cryptocurrencies to derivatives exchanges to increase their risk in the market. It helps them to make more profits during the market recovery.
The MVRV Ratio indicates whether the Bitcoin price is undervalued or overvalued. It is obtained by dividing Bitcoin’s market value (market price) by its actual market value. Currently, the MVRV is 1.07 and is trading near the 365-day moving average (orange line). Thus, it indicates that Bitcoin is about to start a new uptrend.
Indicator shows transition to positive trend
The third indicator, Net Unrealized Profit/Loss, shows the average profit margin of Bitcoin holders. It is also close to the 365-day moving average, indicating an early bull market cycle.
Puell Multiple is the ratio of the daily dollar value of newly issued Bitcoins to one-year moving averages. Currently, the indicator is showing a positive trend as Bitcoin price remains strongly above its 365-day moving average.
CryptoQuant’s Profit and Loss Index indicator combines the MVRV ratio, Net Unrealized Profit/Loss and LTH/STH SOPR into a single Bitcoin value indicator. The Profit and Loss Index points to an early bull market cycle for Bitcoin as the index (dark purple line) crosses the 365-day moving average (light purple line).
BTC price continues upward momentum
As we mentioned at Kriptokoin.com, the price of Bitcoin (BTC) has increased by about 1.26% in the last 24 hours and is currently trading at $ 22,914. In addition, the 7% increase in the transaction volume in the last 24 hours indicates that the interest has increased.
Investors should follow the US dollar index (DXY). DXY falling below 102 in current market conditions will confirm the rally in Bitcoin price.
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