Bitcoin Exchange Supply Shock Ratio Has Rapidly Risen Recently
As explained by an analyst in a CryptoQuant , there seem to be some similarities between the current market trend and that during the summer of 2020.The “exchange supply” is an indicator that measures the total amount of Bitcoin present on wallets of all exchanges.
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On the other hand, a downtrend suggests a push to sell from sellers as they deposit their Bitcoin to centralized exchanges.The value of the indicator seems to have been on the rise recently | Source:In the above graph, the quant has marked the relevant trends of similarity between the Bitcoin markets of summer of 2020 and of right now. It looks like during both the periods, the price was trending down or moving sideways, while the exchange supply shock ratio had been rapidly going up.
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Despite the struggling price at the moment, investors have showed demand for the crypto as they have been rapidly accumulating recently (similar to back then). What followed a few months after the summer of 2020 was the start of a new Bitcoin bull run due to the resulting “supply shock.”The BTC price is heavily tied to the stock market currently, and the analyst believes it’s possible that once it decouples, a similar shock could be there this time as well.
BTC Price
At the time of writing, Bitcoin’s price is trading around $39.8k, down 7% in the past week. Over the last month, the crypto has lost 15% in value.
The below chart shows the trend in the price of the coin over the past five days.The price of the crypto looks to be steadily climbing back up after the plunge down a few days ago | Source:
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com