The number of addresses depositing Bitcoin (BTC) on centralized exchanges has fallen to its lowest level since 2016, indicating a potential easing of selling pressure, according to a recent research note from CryptoQuant.
The metric tracking addresses sending Bitcoin to exchanges fell to 132,100, the lowest level in recent years, indicating fewer investors are moving coins to exchanges and potentially signaling a slowdown in sales.
“In general, seeing less money deposited into exchanges can reduce selling pressure as there is less Bitcoin available to sell,” said Julio Moreno, CryptoQuant’s Head of Research. However, Moreno added that this drop in deposits may not only reflect a decrease in selling interest, but could also indicate a decrease in demand for Bitcoin:
“Some traders are targeting higher prices by depositing money into derivatives exchanges to open long positions, so lower deposits could also signal a decrease in demand for Bitcoin.”
In addition to the declining deposit addresses, CryptoQuant data shows that Bitcoin’s liquid supply on centralized exchanges has been decreasing month over month. There have been approximately 470,000 fewer Bitcoins on exchanges since January, representing a 15% decrease through September. This trend may indicate that more investors are withdrawing their coins as part of a long-term holding strategy, further reducing the available supply on exchanges.
*This is not investment advice.
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