Developments in the cryptocurrency market trigger a rise, bringing important data to the forefront. When it comes to Bitcoin demand, very few statistics tell a more bullish story than Bitcoin reserves on exchanges. Currently, new data circulating on social media shows the amount of Bitcoin available for purchase on major trading platforms is at its lowest level since 2017.
Bitcoin Supply and Price Dynamics
This process, as of May 19, shows the number at 1,918,417 Bitcoin, according to blockchain data analysis platform CryptoQuant. A year ago, this was approximately 400,000 Bitcoin higher. Fahrer commented just in time for the second wave of ETF flows, highlighting the forward demand shock and the combination of “inelastic supply” with the following statements:
“During the peak of the bull market in 2021, approximately 2.7 million Bitcoin were held in exchange reserves, and Bitcoin traded around $69,000. Three years later, reserves have dropped to about 2 million Bitcoin, but trading prices are approaching historic highs.”
Meanwhile, a contributing analyst to CryptoQuant also addressed the topic in one of last week’s Quicktake market updates:
“The last halving event effectively halved the potential new supply from miners, significantly reducing the likelihood of new Bitcoin entering the market through sales. Given these dynamics, it becomes difficult to maintain a bearish trend in Bitcoin.”
What to Expect for Bitcoin?
The Crypto Fear and Greed Index, which could become an encouraging sign for short-term market sentiment, is not rushing to extremes in the current Bitcoin price rise. The index, which uses a range of factors to determine the sustainability of overall crypto sentiment, is currently at 70/100.
Although greedy, this lacks the extreme levels seen during Bitcoin’s journey to its all-time highs of 90/100 in March. The research firm Santiment, which analyzes sentiment, still identified the strongest bullish sentiment in Bitcoin since January. Part of a May 17 X post stated:
“After the surprise rise above $66,000 on May 15 and now above $67,200, the crowd’s sentiment shifted towards Bitcoin.”
Santiment also added that for the positive trend to continue, FOMO among buyers needs to remain low.
