2.5M Bitcoin left on crypto exchanges signals “supply shock”

Key Points

  • Bitcoin exchange reserves have dropped to a three-year low of 2.5 million BTC, indicating a potential supply shock.
  • Institutional buying from ETFs continues to drive demand, potentially leading to a price rally.
  • Bitcoin remains resilient above $95,000 despite global trade war concerns and ETF outflows.

Summary

Bitcoin's exchange reserves have hit a three-year low, signaling a potential supply shock as institutional demand from ETFs continues to grow. This decrease in available Bitcoin on exchanges could lead to a price rally due to the imbalance between strong buyer demand and decreasing supply. Despite global trade war concerns and recent ETF outflows, Bitcoin has maintained its value above the critical $95,000 mark, suggesting strong institutional interest and a possible transition from selling to buying pressure. However, maintaining this psychological support level is crucial to avoid significant downside volatility, with potential corrections below $95,000 threatening to liquidate over $1.52 billion in leveraged long positions. Despite short-term correction risks, the outlook for Bitcoin's price remains optimistic for 2025, with predictions ranging from $160,000 to over $180,000.

cointelegraph
February 12, 2025
Crypto
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