A recent analysis by CryptoQuant has revealed that the number of bitcoin centralized exchange depositing addresses has reached its lowest level since 2016. This significant decrease could indicate a reduction in selling pressure and potentially positive market sentiment for Bitcoin.
According to CryptoQuant’s research note, the number of bitcoin exchange depositing addresses has dropped to 132,100, a multi-year low. This metric represents the number of addresses sending inflow transactions to exchanges, and the analysis suggests that a multi-year low indicates a decrease in the number of investors selling coins on spot exchanges.
Julio Moreno, Head of Research at CryptoQuant, explained that lower deposits into exchanges could lead to lower selling pressure as there is less bitcoin available to sell. However, Moreno also noted that fewer deposits might not solely indicate a decrease in selling interest. It could also signal a decline in overall demand for bitcoin, as fewer traders are making deposits to speculate on price increases.
In addition to the decrease in exchange deposits, CryptoQuant data has shown a month-on-month reduction in the liquid supply of bitcoin on centralized exchanges. This trend suggests that investors are withdrawing their coins and adopting a long-term holding strategy.
