- Over the previous month, leading exchanges have seen withdrawals totaling over 90.7k BTC.
- Investors and traders are expecting high volatility during the impending halving event.
Bitcoin reserves held by crypto exchanges have hit record lows, according to data from CryptoQuant that goes all the way back to the beginning of 2021. Over the previous month, leading cryptocurrency exchanges have seen withdrawals totaling over 90,700 bitcoin, according to statistics compiled by CryptoQuant. Investors are removing their coins as part of a plan to keep them for the long term, and this tendency is limiting the amount of bitcoin that is available for purchase.
Over the last few years, there has been a noticeable trend of bitcoin being moved from exchanges to cold storage. This might be due to a number of causes, including the increasing price of bitcoin, the authorization of spot bitcoin ETFs, and the excitement around the bitcoin halving event. Bitcoin exchange reserves were roughly 2.8 million in July 2021, down around 900,000 coins from when CryptoQuant began tracking this statistic.
Divergence Between Long and Short-term Holders
But according to this week’s Glassnode analysis, data shows that out of the bitcoin that is still traded on exchanges, a lot of it has gone from those with long-term holdings to people with short-term ones.
The Glassnode report mentioned:
“Following a historical tightness in supply, the divergence between long and short-term holder supply has started closing, and as prices rise, and unrealized profits held by investors increase, it entices long-term holders to part with their holdings.”
To alleviate the demand from long-term holders to distribute their holdings, the report said that the supply of bitcoin for short-term holders has grown by around 1.121 million. Since reaching an all-time high of $73,000 in mid-March, the market value of the most valuable digital asset has dropped by almost 10%. All eyes are now on the impending halving event, set to occur in mid-April. Investors and traders are expecting high volatility during the historic event.
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