Bitcoin Exchange Supply Reaches 5-Year Low, Signals Bullish Trends

 Bitcoin Exchange Supply Reaches 5-Year Low, Signals Bullish Trends

Bitcoin Exchange Supply Reaches 5-Year Low, Signals Bullish Trends(Image-Getty)

Confidence among Bitcoin investors remains strong, despite the BTC price dipping to $29,000. Encouragingly, the network activity is also on the rise, adding to the positive outlook.

During the early part of the week, on Monday, July 24, the world's largest cryptocurrency, Bitcoin (BTC), experienced some selling pressure, causing its price to hover around $29,000. The BTC price breached the support level at $29,872 and is now eyeing the next support zone at $27,500.

Notwithstanding the temporary weakness in BTC's price, several on-chain indicators point towards a bullish future. Even with the price dropping below $30,000, there is a noticeable trend of Bitcoins moving off exchanges and into self-custody, resulting in the current BTC supply at exchanges reaching a 5-year low. Santiment, a provider of on-chain data, offers insights on this development:

Despite the recent drop to $29.2k earlier in the week, Bitcoin's trading range remains relatively tight, fluctuating between $28.0k and $31.8k. This narrow range contrasts with the significant fluctuations the asset experienced between 2020 and 2022.

Currently, the market sentiment seems optimistic, with more bullish calls than bearish ones. This lack of concern among traders, even after failing to sustainably stay above the crucial psychological support level of $30k, might not be the most positive signal for an imminent turnaround.

Bitcoin's On-chain Activity on the Rise

According to data from Glassnode, a well-known crypto analyst named Ali Charts highlights the growing number of daily new addresses on the Bitcoin network, indicating an upward trend in network utilization and providing bullish signals.

When the monthly average of new wallets (green) surpasses the yearly average (grey), it signifies increased on-chain activity, signaling a healthier network and growing usage. After a brief decline, Bitcoin's on-chain activity ($BTC) is once again expanding!