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March 20, 2022

Bitcoin (BTC) Supply on Crypto Exchanges Drops to Three-Year Lows, According to Analytics Firm

By Daily Hodl Staff

Blockchain analytics firm Santiment is pointing out some on-chain metrics developing behind the scenes for Bitcoin as BTC rallies above $42,000.

The intelligence firm says that the overall supply of Bitcoin on crypto exchanges has slipped down to its lowest level in over three years.

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“Bitcoin’s ratio of supply sitting on exchanges continues dropping hard, down to its lowest level since December 2018. There is 13.5% less BTC on these exchange wallets compared to just two months ago, amounting to 1.6% less of the overall supply.”

Source: Santiment/Twitter

Santiment also says that the recent price spike in BTC was triggered by a cascade of short sellers being liquidated as the value of Bitcoin moved higher, triggering a short squeeze.

A short squeeze happens when traders who bet on BTC’s price to fall are forced to buy Bitcoin as the price moves against their bias.

“Bitcoin’s rise to $42,300 today was propelled thanks to plenty of short liquidations. Funding rates continue to be a great source for indicating how traders place their bets and peeking in to see if they’re putting their money where their mouth is.”

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Source: Santiment/Twitter

Looking at Ethereum (ETH), Santiment says the second-biggest crypto asset by market cap is also showing bullish fundamentals on-chain.

According to the firm’s data, Ethereum whales, or entities with at least 1,000 ETH in their wallets, have suddenly come to life.

“Ethereum has surged back above $2,900 for the first time since March 2nd, and whale transactions are on the rise big time. Yesterday was the first day with over 7,000 $100,000+ transactions on the ETH network since the war news broke.”

Source: Santiment/Twitter
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Featured Image: Shutterstock/Tithi Luadthong