- BTCs Exchange Depositing Addresses indicator has moved down in recent weeks.
- Investors were not interested in selling their BTC holdings.
Like Bitcoin’s [BTC] price continues to hover in the $30,000 region, the downward trend in the coin’s deposits on cryptocurrency exchanges indicates a decline in interest in selling the leading crypto asset, pseudonymous CryptoQuant analyst Tarekonchain found in a new report.
Read Bitcoin [BTC] Price forecast 2023-2024
Tarekonchain reviewed BTC’s Exchange Depositing Addresses indicator and found that the indicator has been on a downward trend since the peak of the last BTC cycle. This indicator is often used to assess the activity and liquidity of assets on exchanges.
When an asset’s Exchange Depositing Addresses indicator moves up, it suggests that more market participants are actively depositing and trading the cryptocurrency on exchanges. Conversely, a decline indicates a decreased interest in trading that particular asset.
Source: CryptoQuant
In the current BTC market, Tarekonchain noted:
“Exchange Depositing Address indicator has reached its lowest low, indicating that investors are showing minimal interest in moving their Bitcoin assets to exchanges. This behavior can be interpreted as a sign that investors view the current price as favorable for holding and accumulating Bitcoin in their wallets.”
Hold on, soldier!
A look at BTC’s exchange activity confirmed Tarekonchain’s position. According to data from Sanitation, in the past 90 days, the supply of BTC on exchanges has decreased by 6%. Conversely, the supply of the leading coin held off exchanges has grown by 1%. This showed that while the past three months have been marked by severe volatility in the price of BTC, many have remained steadfast in their decision to stick with the crypto asset.
Source: Sentiment
During that period, BTC whales increased their holdings. According to Santiment, the number of BTC whales has grown from 1% with between 1 and 1,000,000 BTCs. This growth occurred amid significant price swings.
Source: Sentiment
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While the general lack of desire on the part of many to sell could be good for the price of BTC, it can be difficult for the price to grow when investments go dormant for an extended period of time. A look at BTC’s Mean Dollar Invested Age indicator (MDIA) confirmed that this could be the case here.
Source: Sentiment
According to Sanbase, this metric is defined as the average age of all coins/tokens on the blockchain weighted by purchase price.
While it is common for the MDIA to grow as investors HODL, if this metric continues to rise over an extended period of time, usually months, it suggests a worrying level of stagnation within the coin’s network. This kind of stagnation often makes it difficult for a coin’s price to break through psychological price points.
