While Bitcoin (BTC) is hovering around its yearly highs, a report from CryptoQuant shows that the supply on centralized exchanges is its lowest in six years.
Whales usually transfer their Bitcoins to a centralized exchange for offloading them. When they are accumulating, they withdraw from the centralized exchanges to self-custody solutions.
Hence, a low supply on centralized exchanges is typically considered a bullish signal for crypto assets. It may indicate that investors are not intending to sell their assets anytime soon. However, there are other factors that investors should be cautious about.
Bitcoin (BTC) May Surpass $50,000: CryptoQuant
A CryptoQuant community member, “Papi,” shared that Bitcoin supply on centralized exchange is back to 2017 levels for the first time. They wrote:
“We are in the 45th month of diminishing supply.”
Bitcoin Supply on Centralized Exchanges. Source: CryptoQuant
Additionally, according to a CryptoQuant report, Bitcoin might skyrocket in the $50,000 — $53,000 range during the beginning of 2024. The report cited a Metcalfe price valuation band metric that relies on data such as market capitalization, transaction volume, and user activity.
Short-Term Correction Imminent?
In contrast, the report also advised exercising caution, considering that 86% of the circulating supply is currently in a profitable state. Moreover, the funding rates are also at a premium. BeInCrypto explained earlier:
“The funding rate is a fee that helps keep the price of an asset’s perpetual future contract in equilibrium with its spot price. If the perpetual futures contracts are trading at a premium, the long traders will pay the funding fees to short traders, and vice versa.”
Read more: How To Evaluate Cryptocurrencies with on-Chain and Fundamental Analysis
Bitcoin Supply in Profit (%). Source: CryptoQuant
Lastly, the Global Head of News at BeInCrypto, Ali Martinez, shared on X (Twitter) that Bitcoin has stable support at $42,700. He elaborated:
“This level is significant, as 642,000 wallets have bought 347,000 BTC here.”
If Bitcoin breaches the support at $42,700, Martinez explained that $38,000 should be the next critical zone to keep an eye on. However, if Bitcoin continues its bullish trend from $42,700, it might visit the next major supply zone at $47,300.
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
Ali Martinez Explains Bitcoin Has Stable Support at $42,700. Source: X (Twitter)
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