The latest data show that Bitcoin (BTC), which is available on exchanges, is set to reach its lowest level ever.
According to CryptoQuant CEO Ki Young Ju, exchange reserves have fallen back to their lowest level since early May.
Is it time for another “sell-side liquidity crise” in Bitcoin?
September 9, 2018, the most recent date for which figures were available, showed that there was 2.399,000,000 BTC available on major exchanges. May’s low was 2.390 million.
Bitcoin traders have reversed the deposit trend that developed during the price rise of mid-May. This is a clear indication of a return to an investment-focused mentality and not speculation.
Ki commented, “Hope to see another sale-side liquidity crisis Bitcoin.”
Bitcoin exchange reserves vs. BTC/USD chart. Source: CryptoQuant
This crisis, also known as “supply squeeze”, has been a common theme in recent weeks. It was bolstered by healthy buying up excess liquidity following Tuesday’s price drop.
Retail is not the only victim of this trend. Derivatives platforms also saw major withdrawals of BTC this past week. However, overall BTC supply is decreasing in mobility.
Glassnode, a fellow on-chain analytics company, confirmed that Friday’s supply reached a three year low.
People who moved BTC to an address in September 2019 or September 2020 last year are not allowed to touch their holdings.
Chart of BTC supply that was last active 2 years ago. Source: Glassnode/ Twitter
Bitcoin support levels suggest $43,000 floor
BTC/USD traded below $46,000 as of Friday’s writing.
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Michael van de Poppe, a Cointelegraph contributor, denied that Bitcoin has entered a bearish market. However, nearby levels are tipped for support.
They are $45,700. If it fails, they will be replaced by between $43,000- $44,000
He added, “On the plus side, we know that $46,700 remains a very important resistance level.”
“If it cracks, I believe the chances that the Altcoin Markets will break through $47500 all the way to $50,000 are significant. The altcoins markets will be strengthened as they will follow the example of the altcoins.”
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView