Up signal? CryptoQuant: Exchange Bitcoin balance hits 3-year low, supply continues to tighten

Bitcoin has continued to fluctuate and fall recently. At the time of writing, it is continuing to hold the $65,000 mark, falling 4.7% in the past week. However, data shows that the Bitcoin balance on exchanges recently hit a three-year low, which may mean that investor sentiment has turned bullish (bitcoins are transferred out to cold wallets for storage), and the selling pressure on BTC may be alleviated.

According to CryptoQuant data as of June 19, Bitcoin’s exchange balance (the total amount of Bitcoin available on exchanges) has 2,825,703 Bitcoins remaining, falling to a 3-year low. During January this year, the balance of Bitcoin exchanges hovered around 3,039,000.

You can also see from the picture below that when the BTC balance of the exchange experienced a large decline, the price turned upward many times soon after. However, the biggest difference between the current situation and history is the launch of US spot ETFs, so the reference value may also change.

Bitcoin spot ETF drives BTC supply shock

According to the Coinshares weekly funds flow report on June 17, the Bitcoin investment vehicle holds nearly $73 billion in Bitcoin globally. However, the same report also showed that weekly outflows from Bitcoin investment vehicles were $621 million in the week ending June 15, 2024, which was the largest outflow since the week ending March 22, 2024.

Coinshares analysis pointed out that the Federal Reserve's "more hawkish than expected" remarks imply that the Federal Reserve will maintain high interest rates for a longer period of time, leading to capital flight from fixed supply assets such as Bitcoin.

However, experts such as Franklin CEO Jenny Johnson believe that institutional adoption of Bitcoin has not yet fully launched. She said in an interview with CNBC: "This is really the first wave of early adopters, and I think the next wave is bigger. Institutions enter the market. "

If her prediction comes true, institutional capital will continue to flow into Bitcoin. In addition, the halving completed in April this year further limits the supply of Bitcoin, which may provide impetus to the rise of BTC.

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