There are always some cryptocurrency metrics that might raise a few eyebrows. As the world’s leading cryptocurrency, Bitcoin records several lows in quick succession. A low for addresses sending to exchanges is positive, but similar momentum for exchange withdrawals isn’t too impressive.
Fewer BTC Addresses Sending To Exchanges
When the crypto markets get through a bearish period like the past few days, things can get a lot worse. Any temporary dip can trigger a significant sell-off. One way to determine if that is in the cards is by looking at the number of Bitcoin addresses sending to exchanges. If that metric rises, there will be more liquidity and, consequently, volatility for traders to contend with.
Thankfully, it appears people have little interest in sending BTC to trading platforms. The metric for addresses sending to exchanges depicts a one-year low, which is somewhat surprising. Such a substantial decrease in activity indicates more people should explore the “buy and hold” mentality. One can flip Bitcoin for profit quickly, but the more significant gains come from holding long-term.
The current one-year low for addresses sending to exchanges comes at an exciting time. With the Christmas period around the corner, one would expect more people in profit to cash out ahead of the holidays. However, most people also know that current gains may be minimal compared to the price next year. Additionally, Q4 is traditionally a neutral period for Bitcoin’s price momentum, indicating things can only improve from here on out.
Whether the addresses sent to exchanges will continue to decrease remains uncertain. It will primarily depend on how the Bitcoin price evolves over the coming weeks and months. As the number of active addresses also hits a one-month low, there may not be any immediate change for these metrics either. An intriguing scenario that shows there is much more going on in crypto than people give credit for.
Exchange Withdrawals Dip Too
Interestingly, it is not just the addresses sent to exchanges that are declining. A similar trend affects the number of exchange withdrawals, indicating there is some disinterest in using trading platforms all of a sudden. However, there is still sufficient liquidity on these trading platforms to trigger any price action, either for better or worse. Under the current bearish conditions, a market reversal seems somewhat unlikely.
It is pertinent for Bitcoin and other crypto assets to have more withdrawals than deposits to trigger price momentum. For now, the dip in withdrawals is a one-month low, which doesn’t have to be problematic. Moreover, there is a strong dip and deposits, and traders will buy up the current liquidity over time. The final weeks of 2021 will prove rathe exciting for Bitcoin in many different ways.