Bitcoin’s recent price action has been accompanied by some interesting on-chain data. Let’s break down what it all means.
The “Hot Supply” is Shrinking
The “Hot Supply” of Bitcoin, which tracks coins moved in the last week (the most liquid portion), has plummeted. According to Glassnode, it’s down over 50% in the last three months – from 5.9% to a mere 2.8%. This means significantly less Bitcoin is readily available for trading. Think of it like this: less readily available Bitcoin means less immediate selling pressure.
Exchange Inflows are Down Too
Another indicator, Exchange Inflow (the amount of Bitcoin sent to exchanges – usually to be sold), is also way down. It’s dropped from a daily average of 58,600 BTC during the bull run to around 26,900 BTC now. This suggests less selling pressure and weaker overall demand.
Futures Market Slowdown
The futures market is also showing signs of cooling down. Open interest (the total value of outstanding Bitcoin futures contracts) has fallen by 35% from its all-time high of $57 billion to around $37 billion. This further supports the idea that overall market activity has decreased.
What Does it All Mean?
The combined drop in Hot Supply, Exchange Inflow, and Futures Open Interest points to a significant reduction in overall Bitcoin market activity. This suggests a “risk-off” sentiment among investors, with less trading and less immediate selling pressure.
Bitcoin’s Price
While Bitcoin briefly climbed above $28,000, it has since pulled back slightly. This price movement, while notable, needs to be considered alongside the broader trend of reduced market activity indicated by the on-chain data.
