The on-chain data indicates that Bitcoin exchange deposits are at an all-time low of 4 years. This suggests that it may be the end.
Bitcoin 30-Day MA Exchange Depositing Transactions Have Slowed
An analyst from CryptoQuant pointed this out post, the metric’s current levels are the same as in Q1 2019. The “exchange depositing transactions” is an indicator that measures the total number of Bitcoin transfers that are headed toward centralized exchanges.
This indicator is different from the popular exchange inflow. It tells us how much BTC has been deposited to exchanges. The combined value of all transactions going to exchanges is the sum of these values. However, this value can be inflated by some whales. They are therefore not representative of the market’s trend (especially retail investors).
The exchange depositing transactions focus only on the total number of transactions, not their amounts. This could allow for a better picture about whether or not an average investor is sending money to exchanges.
A high value of this indicator could have negative implications on the price of crypto, as it is used to sell the cryptocurrency. However, low values could indicate that investors are not applying selling pressure at the moment.
Below is the chart that shows the trend over the last few years in Bitcoin exchange depositing transactions.
Source:| Source: CryptoQuant
The graph shows that 30-day MA Bitcoin Exchange depositing transactions have fallen for a while, and have recently fallen to very low levels. These levels are the lowest observed by the indicator since Q1 2019, which was four years ago.
The asset price was at its lowest point, and the bear market was in its final stages. This means that there is a historically low appetite to deposit coins on exchanges and sell BTC.
This could mean that the market has reached its end and the bottom of the current BTC cycle could be in sight. However, the quant in the post also notes that the bottoming process being possibly here doesn’t discount the possibility that there could still be a final downward push left for Bitcoin.
Bitcoin traded at $16,700 at the time of writing. That’s an increase of 1% over the week.
Source:| Source: BTCUSD on TradingView
Featured image taken from Thought Catalog on Unsplash.com. Charts from TradingView.com and CryptoQuant.com.