On-chain data shows that Bitcoin transaction supply has grown by 3.1% in the past two weeks. This could mean something.
Bitcoin supply on exchanges has been increasing recently
According to data from on-chain analytics companies saint, the exchange has recently received a large number of Bitcoin deposits. “Exchange supply” is the percentage of total Bitcoin currently in circulation across all centralized exchange wallets.
When the value of this indicator rises, investors deposit a net amount of tokens into these platforms. Generally speaking, one of the main reasons why holders choose to transfer tokens from self-custodial wallets to exchanges is for sale-related purposes.
Therefore, whenever the value of this indicator is trending upward, it could be a potential sign that the market is preparing for a sell-off, which will naturally be negative for the price.
On the other hand, lower indicator values mean that net supply is leaving these platforms, which may indicate that investors are accumulating. A reduced likelihood of a sell-off could be positive for prices in the long run.
Now, the chart below shows the trend in exchange Bitcoin supply over the past few months:
The value of the metric seems to have been going up in recent days | Source: Santiment on X
As shown in the chart above, Bitcoin supply on exchanges has been declining over the past few months, but the metric has changed recently.
Over the past few weeks, the indicator has reversed course, rising 3.1%. The bi-weekly increase in exchange supply is the highest observed since early March.
Many of these deposits came in before and during the Grayscale rally. Since the price increase will not last long, it is reasonable to assume that investors have already made selling transactions on these platforms.
Rather than resuming its downward trend after the price crash, the indicator has continued to move higher over the past few days, with its value now touching the 5.975% mark.
Santiment noted that this suggests investors are motivated to make the smallest possible profit, so they deposit funds in preparation for exit opportunities.
Bitcoin has retreated to $26,400
Over the past day, BTC rose to the $26,400 level, but in the past few hours, the asset has moved back to the $25,800 mark.
A rapid retracement of the coin could indicate that investors who were ready to deposit funds have begun selling, creating a bearish impulse for the asset.
BTC continues to move sideways | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net