Bitcoin's on-chain data shows increasing investor sentiment for holding, propelling its price to new yearly highs. Exchange data reveals the lowest supply levels in six years, indicating a potential sustained bull run. Anticipation of spot Bitcoin ETF applications and increased adoption are contributing to the bullish signal. Analysts predict Bitcoin could surpass $100,000 in 2024.
Our analysis of the situation
On-chain data has revealed an increasing sentiment of holding Bitcoin among investors. Bitcoin has been on a roll since the start of the month, pushing its price to new yearly highs. At the same time, exchange data from CryptoQuant reveals that the crypto might be gearing up for a sustained bull run.
CryptoQuant’s exchange reserve chart demonstrates that the supply of Bitcoin has been steadily decreasing from centralized exchanges since 2020, when it reached a high of over 3.2 million BTC. The outflow was particularly aggravated in the last quarter of 2022, when the collapse of crypto exchange FTX led to panic and investors started to opt for self-custody in cold wallets.
The reserve on centralized exchanges has been on a steady drop since then. At the time of writing, the exchange reserve has now crossed below 2 million BTC, a level it has yet to reach since December 2017. This metric’s six-year low is particularly interesting, considering Bitcoin’s total circulating supply has increased since 2017.
Dropping exchange supply is a bullish signal for crypto assets, and periods of low exchange supply have historically been associated with the beginning of significant Bitcoin bull runs. The last time Bitcoin had a drastic drop in exchange reserve was in 2020, and the crypto would later go on to reach its all-time high the year after.
Bitcoin is currently spearheading new inflows into the crypto industry, with Coinmarketcap’s Fear and Greed Index now pointing to an extreme greed of 82. The industry’s leading asset recently broke over $44,000 for the second time this week and is now up by 14% in a 7-day timeframe. Bitcoin is poised for extreme gains in 2024, and many analysts have predicted a price target above $100,000.
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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