Bitcoin saw immense volatility in the last six weeks as the price dipped from nearly $60,000 on 12 May to as low as $29,000 on 22 June. The exchange supply ratio of Bitcoin, which is one of the most important indicators of the overall BTC network activity, dropped substantially in the last few weeks.
According to Santiment, crypto analytics and on-chain analysis firm, the Bitcoin exchange supply ratio has reached its lowest level in nearly six months. The price of the world’s largest digital currency is making a strong comeback.
“Following Bitcoin’s mid-May dip, the supply of BTC sitting on exchanges has steadily fallen back down and locked away for safekeeping by holders. This is a good sign for bulls, as funds moving away from exchanges lowers the risk of major sell-offs,” Santiment mentioned.
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One of the major reasons behind the recent dip in the exchange supply ratio of Bitcoin is the movement of BTC from leading crypto exchanges to digital wallets. Bitcoin whales have accelerated their transfers in recent days.
Whale Alert highlighted the movement of more than 6,000 BTC in four different transactions from crypto exchange Coinbase to digital wallets. In the first transfer, a Bitcoin whale account moved 2,193 BTC worth over $75 million from Coinbase to a crypto wallet on Thursday 1 July. Similarly, another transfer of 2,186 BTC from Coinbase to a digital wallet was recorded on 30 June. Two transactions involving 1,000 BTC and 900 BTC respectively were also executed yesterday.
Earlier this week, Glassnode published a report and mentioned that the overall Bitcoin network activity has dropped substantially since China’s crypto crackdown. The mining hash rate has dropped nearly 50% from its recent peak while mining revenues have also dipped significantly. As a result, Bitcoin miners have increased selling pressure due to a sharp increase in logistic expenses incurred by the mining companies in relocation. The total number of active BTC addresses also dropped heavily in the last few weeks.