Bitrabo Editorial
Recent on-chain data suggests that there has been a divergence in the exchange supplies of Bitcoin and Ethereum, hinting at a potential rotation in the market.
Bitcoin’s Exchange Supply Declines as Ethereum’s Rises
Information from the on-chain analytics company Santiment reveals that the Supply on Exchanges metric for Bitcoin hit its lowest point since December 2021.
This metric monitors the total volume of a cryptocurrency’s supply held in wallets linked to centralized exchanges.
An uptick in the metric signifies that investors are depositing the asset on these platforms, typically to engage in trading or other services provided by the exchanges.
Conversely, a drop in the indicator suggests that investors are withdrawing coins from exchanges, possibly for long-term holding purposes.
An illustration displays the trends in Supply on Exchanges for the top three cryptocurrencies by market cap: Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
The chart depicts a significant decrease in Bitcoin exchange supply in recent months, hitting 942,170 BTC, the lowest level since December 2021.
Simultaneously, Ethereum and Tether have experienced net deposits, indicating potential trading activity.
The contrasting movements in Bitcoin, Ethereum, and Tether supplies on exchanges suggest a rotation of capital, which could pose bearish implications for Ethereum.
USDT, being a stablecoin pegged to the US dollar, remains unaffected by exchange inflows. These inflows are perceived positively for the market, as they suggest the readiness of investors to redeploy capital.
Despite the decline in Bitcoin’s exchange supply, its price has been consolidating sideways in recent months.
Bitcoin Price
Currently, Bitcoin hovers around $67,900, showing a nearly 5% decrease over the past week.