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As Bitcoin (BTC), the world’s largest cryptocurrency by market value, enters an accumulation phase, it has been trading around $26,000 in recent days. While the price has been quiet, there has been an increase in Bitcoin outflows from cryptocurrency exchanges, following lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase.
BTC Supply on Cryptocurrency Exchanges at a 5-Year Low
According to on-chain analytics platform Santiment, amid escalating regulatory pressures, users opting for self-custody has caused the supply of BTC on exchanges to recede to its lowest level in the past five years. Santiment said, “The supply of Bitcoin on exchanges is at its lowest level since February 2018. Investors continue to take their Bitcoins into their own custody due to uncertainties surrounding Binance and Coinbase. As long as the SEC’s pressure continues, this trend is expected to persist.”
Furthermore, the analytics platform noted a clear shift of investors’ focus from Bitcoin to altcoins. As altcoins like Ethereum‘s ETH, Ripple’s XRP, and Binance’s BNB enter the picture, Bitcoin‘s social volume has started to decline.
What’s Next for Bitcoin Price?
It seems nearly impossible to determine where the price of Bitcoin, which has been unable to make a significant move for a while, will go. Market sentiment surrounding the largest cryptocurrency does not look positive at the moment. Noted crypto analyst Michael Van de Poppe suggested that the market might continue to be under pressure, stating the $26,400 level is a significant barrier upward for Bitcoin, and that a drop to between $24,500 and $25,000 is on the table ahead of the Fed interest rate decision.
On the other hand, short-term Bitcoin investors are also approaching a significant threshold. Even though they have made substantial profits with a 70% value gain since the beginning of 2023, crypto data platform Glassnode reported that with the spot price continuing to decline, the Realized Profit/Loss Ratio for short-term investors is approaching a balance (decision) point. Therefore, if the Realized Profit/Loss Ratio rebounds from the balance point, this will be positive for the market, but a drop below the balance point will be a clear sign of weakness.
Lastly, the correlation between cryptocurrencies and U.S. exchanges is also rapidly disappearing. While the S&P 500 continues to rise, BTC and ETH have been unable to keep up with this rally and remain in the background.
