Bitcoin holdings on exchanges by long-term investors have decreased to their lowest levels in 18 months, report said.
A significant decrease in the inactive supply of bitcoin that has not moved in over a year is indicative of long-term holders either continuing to trim their holdings or moving their assets off exchange, according to this week's Bitfinex Alpha report.
The report added that the current actions of bitcoin holders mirror those seen in December 2020, just before a significant rise in the bitcoin market. "This pattern suggests we may be entering a similar growth phase," the analysts added.The reduction in long-term holder supply on exchanges observed by Bitfinex corresponds with data from CryptoQuant. Charts show bitcoin exchange reserves have reached their lowest levels ever recorded by CryptoQuant data, which spans back to early 2021.
Bitcoin exchange reserves have dropped to their lowest level on CryptoQuant charts. Image: CryptoQuant.After the sell-off on Monday, the approaching halving event has put the bitcoin market at a crossroad. The Bitfinex report said that after the large liquidation event over the past two days, which pushed prices sharply lower, there are now indicators, including funding rates stabilizing, that suggest traders’ attention has returned to the upcoming halving.
"There is still price discovery potential particularly with the addition of geopolitical volatility which has unexpectedly softened prices in the short term," Lehes said in an email sent to The Block.Every four years, a mechanism coded into bitcoin’s blockchain cuts the block reward miners earn in half. This time around, that means each new block of bitcoin that’s mined roughly every ten minutes will yield 3.125 BTC, down from the current 6.25 BTC block reward.
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