It is not entirely surprising to see the Bitcoin exchange balances hit a two-year low at this time. Even though the price momentum isn’t too convincing, there is still a high demand for BTC. Similarly, the current exchange netflow hits an all-time low, creating another bullish signal.
Bitcoin Exchange Balances Keep Decreasing
People who have kept a close eye on the Bitcoin metrics recently will know that centralized exchanges may face a supply shortage of sorts. There is much more BTC being bought than people are depositing. Under normal circumstances, this will drive the Bitcoin price higher, yet that isn’t always the case. Crypto markets tend to behave in very unusual ways.
Looking at the numbers, the Bitcoin exchange balances currently sit at 2.369 million BTC. A more than substantial amount when looking at the bigger picture. However, the downtrend continues without missing a beat. This downtrend has been in place for a while now, culminating in a two-year low.
For now, it doesn’t appear as if this trend will reserve soon either. Since the recent block reward halving, exchanges have been unable to keep up with the demand for BTC. Additionally, dozens of public companies are setting up a Bitcoin treasury, further contributing to this dwindling supply.
Unlike most other cryptocurrencies, Bitcoin is finite. There are only so many BTC to ever exist, and only so many Bitcoin to be brought in circulation every day. If there isn’t enough volume to fill the order book, the price will need to move up eventually. Reaching a value of $70,000 and higher remains plausible, although the timeframe is unclear. Staying above $60,000 poses a significant challenge at this time.
Exchange Net Flow Hits An All-Time Low
Perhaps the most intriguing of the two main Bitcoin statistics today is the exchange net flow. Similar to the Bitcoin exchange balances, this metric is drifting lower regularly. So much even that it is now at an all-time low, which is somewhat indicative for the world’s leading cryptocurrency.
The current netflow has an all-time low of minus $79.016 million. That may not seem like much at first glance. However, the previous low was recorded less than two weeks ago at minus $66.746 million. Such a sudden jump in negative outflow indicates there is a lot of BTC being bought up from centralized exchanges.
Figuring out where these funds are going and for which purpose is always the challenging part. A negative exchange netflow can indicate many things, although it is all based on speculation first and foremost. Exchanges may be reshuffling their wallets, for all we know. Even so, the all-time low is very intriguing and should paint a bullish BTC price picture.