Bitcoin Facing Low Supply Due to Crypto Whales’ Activities

As the purchase of Bitcoin by Whales and institutional investors increases, its supply has become low on exchanges.

The supply of Bitcoin (BTC) on cryptocurrency exchanges has decreased to its lowest level since December 2021 due to increased demand. Bitcoin’s supply on exchanges has reduced to approximately 942k coins, valued at roughly $64 billion, per Santiment’s on-chain data analysis.

In the interim, Santiment suggested that the supply of Tether (USDT) and Ethereum (ETH) has progressively increased. Ideally, an increase in the balance of exchanges is correlated with an increase in the pressure to sell, and the reverse is also true.

Nevertheless, the escalation in the supply of stablecoins on exchanges is interpreted as an increase in the general purchasing pressure, resulting in a bullish sentiment. Additionally, the stablecoins industry has historically been employed as an exit liquidity mechanism in response to the high volatility of cryptocurrency.

Crypto whale wallets have amassed over 20,000 Bitcoins in the past 48 hours, as indicated by on-chain data analysis conducted by CryptoQuant.

The accumulation of crypto whales for Bitcoin has increased volatility and liquidation for leverage traders. In the interim, El Salvador has been purchasing one Bitcoin daily in addition to its mining operations, resulting in over 5,779 coins.

Direct Influence on Bitcoin Price Action

Bitcoin prices have maintained a consistent range of below $72K and above $61K over the past four months. Since January last year, the flagship coin has progressively increased its dominance in the crypto market to approximately 55.62 percent.

The bullish sentiments have been considerably enhanced by the approval of spot Bitcoin exchange-traded funds (ETFs) in the United States, Thailand, Hong Kong, and Australia. Additionally, Bitcoin’s price has remained near the all-time high (ATH) of 2021 for the past few months, distinct from the behavior of previous significant bull cycles.

The Bitcoin price has been exhibiting a descending broadening wedge on the daily timeframe, as per Captain Faibik, a renowned crypto analyst. Nevertheless, the crypto analyst suggested that the Bitcoin price relative to the United States dollar must maintain a consistent close above the resistance level of approximately $72K in the upcoming weeks.

The probability of a bullish reversal will substantially increase if the Bitcoin whales maintain the high accumulation rate observed recently. In this scenario, the Bitcoin price will strive to reach the next midterm target of $80K to $86.8K, equivalent to the 0.5 and 0.618 weekly Fibonacci Extension.

A broader perspective

Institutional investors’ increased adoption of Bitcoin indicates the altcoin industry’s increased liquidity. This will inevitably lead to a more erratic altseason than previous bull cycles.

Additionally, the recent approval of spot Ethereum ETF in the United States and Hong Kong has encouraged the potential for similar products to be approved for other altcoins. Furthermore, the cryptocurrency industry will be accessible to more investors shortly who can invest seamlessly.