Bitcoin has experienced an almost unstoppable rebound since the March low of $ 3,700. Cryptocurrency at last week's highs increased more than 170% from lows, taking advantage of $ 10,100 after a dramatic jump.
This trend has been marked by crypto investors withdrawing their BTCs from mass exchanges in a strong boost to Bitcoin's medium term bullish case.
Bitcoin withdraws from mass trading
Bitcoiner star Jameson Lopp recently said that, according to data from Coin Metrics, the amount of BTC held by BitMEX and Bitfinex, the first futures market and a first-rate market, respectively, "reached new lows after the & # 39; collapse. March 12 ".
The metric table below indicates that Bitfinex now has 93,800 BTC, not a small sum, but almost exactly 100,000 coins less than on March 13. Likewise, BitMEX's supply dropped to 216,000 BTC after peaking at 315,000 coins in March, another drop of almost exactly 100,000 coins.
The withdrawn coins are worth more than $ 1.7 billion.
The amount of BTC held by BitMEX and Bitfinex reached new lows after the March 12 crash. Bitfinex now has 93.8K BTC, down from 193.9k on March 13. BitMEX's BTC supply has now dropped to 216.0 K BTC, from a peak of 315.7 K on March 13. H / T @coinmetrics pic.twitter.com/gesZ3QahcK
– Jameson Lopp (@lopp) May 12, 2020
While the data mentioned by Lopp excludes other major exchanges, blockchain analysis company Glassnode noted last month that the overall balance of the exchange was also down.
This would mean that the feeling that all of the withdrawn Bitcoin is sent to other exchanges from the operators mentioned above is somewhat false.
In its data, Glassnode said that it is a likely sign that Bitcoin investors are turning to a longer-term investment strategy, rather than trading currencies quickly in the hope to make quick profits.
H0w This trend could boost Bitcoin
Although apparently Bitcoin moves without rhyme or reason, cryptocurrency is like any other market in a key way: most of the price movements of a market asset free are based on supply and demand.
Encyclopedia Britannica Basic Supply and Demand Chart
This means that, assuming constant demand, the decrease in the supply of an asset in a market should lead to an increase in the break-even price. And assuming constant supply, an increase in demand should also drive up prices.
The withdrawal of Bitcoin from mass exchanges, which decreases the likelihood that coin owners will sell their holdings, decreases Bitcoin's market supply. Assuming constant demand, prices should rise.
Now add to that the fact that the BTC block reward reduction has just taken place. This strongly implies that the supply of parts sold on the market is expected to further decrease, further increasing the potential break-even price.
BTC demand increases
Simultaneously, analysts say the demand for cryptocurrencies is increasing and will continue to increase in the future.
Alex Kruger, an economist who tracks crypto space closely, recently noted that with legendary macro-investor Paul Tudor Jones announcing his support for Bitcoin, the "incremental demand" for that space "came":
"The letter from Paul Tudor Jones is the most optimistic thing ever written about bitcoin, and it came from Tudor himself. I see it as a game changer. Think that many macro investors will follow. mandates and incorporation take time, "said the analyst.
Related Reading: Industry CEO Always Convinced $ 50,000 Bitcoin Rockets In 2020 – Here's Why
Photo by Jonathan Leppan on Unsplash
