Journalist
Posted:
- The surge in BTC and USDT supply on the exchanges shows contradictory trends
- Since December 1, BTC miners have increasingly sold off some of their holdings
After an extended period of recovery, the general market is currently characterized by volatility. Because of this, there are two conflicting trends in Bitcoin-related activity [BTC] and stablecoin USDT were created.
What are these trends?
BTC’s key volatility indicators have been rising in recent weeks, indicating that the leading coin is sensitive to price fluctuations. For example, the Average True Range has increased by 32% since December 3. Likewise, the Bollinger Bandwidth (BBW) has increased by more than 250% over the same period.
The values of these indicators suggest that the price of BTC has become more volatile since the beginning of December. Hence the increase in the supply of the coin on exchanges.
Source: TradingView
As the positive sentiment behind BTC begins to wane, there has been an increase in the number of BTCs being sent to exchanges in recent weeks. Since December 5, BTC’s foreign exchange reserve has risen steadily. With a stock of 2.03 million BTC at the time of writing, the amount of BTC held on the exchanges has grown by 5% since then.
Source: CryptoQuant
An increase in BTC’s exchange reserve indicates a growing potential for selling pressure in the market. In a volatile market, this means investors are cautiously moving their holdings back into the stock market, indicating a degree of uncertainty and selling potential.
Interestingly, as the supply of BTC on exchanges grows, there has also been a steady increase in the presence of stablecoin USDT on exchanges. Basically an on-chain data provider Santiment revealed that it has increased by 7% in the past six months. According to the same report, USDT supply on the exchanges has increased by 29% since November 30.
Source: Santiment
Typically, these USDT inflows suggest that investors are accumulating and holding the stablecoin, possibly in anticipation of a bullish market rebound. However, the increase in BTC’s foreign exchange reserves points to uncertainty in the market as volatility increases.
Are miners also preparing for a price drop?
With Bitcoin trading at an 18-month high, miners have been sending some of their BTC holdings to exchanges for further sale. Since December 1, BTC’s Miner Reserve has fallen 1% on the charts.
This metric measures the number of coins held in the wallets of affiliated miners. His value indicates the reserves that miners have yet to sell. At the time of writing, this figure stood at 1.83 million BTC. Since the beginning of the month, miners have sold 5288 BTC.
Source: CryptoQuant