Bitcoin Exchange Withdrawals Hit One-Year High, BTC Price Surge Ahead? | Coinspeaker

Bitcoin Exchange Withdrawals Hit One-Year High, BTC Price Surge Ahead?

A Bybit report suggests that the Bitcoin supply will be 2x scarce than gold after halving. With strong ETF demand, the Bitcoin reserves on centralized exchanges would last for nine months only.

Bhushan Akolkar By Bhushan Akolkar Julia Sakovich Edited by Julia Sakovich Updated 3 mins read
Bitcoin Exchange Withdrawals Hit One-Year High, BTC Price Surge Ahead?
Photo: Depositphotos

The world’s largest cryptocurrency Bitcoin (BTC) has continued to face selling pressure off-lately as we approach the fourth Bitcoin halving ahead this week on April 20. However, on-chain activity shows some bullish developments ahead of BTC halving 2024.

As per on-chain data provider CryptoQuant, the Bitcoin withdrawals from the exchanges have reached their highest levels since January 2023. This clearly hints at strong ongoing accumulation before the supply shock kicks in post the halving event. Furthermore, the expectation that the Bitcoin supply shock will lead to a price surge, could be another reason behind the exchange withdrawals.

Bitcoin Exchange Withdrawals Hit One-Year High, BTC Price Surge Ahead?

Photo: CryptoQuant

Also, the developments taking place in the Bitcoin derivatives market are on a positive note. CryptoQuant analyst Burak pointed out that the open interest in derivatives exchanges has dropped from $18 billion to $14.2 billion. As a result, there’s a drop in the excess leverage trading happening in the market. This comes after a period of high trading activity and could imply a temporary market stabilization.

Bitcoin Exchange Withdrawals Hit One-Year High, BTC Price Surge Ahead?

Photo: CryptoQuant

CryptoQuant analyst CoinLupin observes that Bitcoin has reached the support zone in the Short-Term Holder Spent Output Profit Ratio (STH SOPR), indicating a potential buying opportunity as short-term holders start to sell off. This phase has historically preceded price increases.

Bitcoin to Become 2X Scarce than Gold After Halving

As we know each halving event leads to a supply shock for Bitcoin cutting the supply by half. However, the upcoming halving event this week holds greater significance since Bitcoin is likely to become twice as rare as gold, said analysts from crypto exchange Bybit.

The Bybit report which talks about what to expect after the halving event reveals that the BTC supply on all centralized exchanges will be consumed in just nine months.

According to Bybit, the Bitcoin stock-to-flow (S2F) model supports its assertions, as the metric indicates that BTC becomes rarer than gold following each halving event. The S2F ratio measures scarcity by dividing a commodity’s circulating supply by its annual production.

As of the latest data, Bitcoin’s S2F ratio stands at approximately 56, slightly lower than gold’s ratio of 60. However, post-halving, Bitcoin’s ratio is projected to double to 112, further emphasizing its increasing scarcity compared to gold.

While the Bitcoin halving will reduce supply at one end, the demand from Bitcoin ETFs will also aid in reducing the available supply. As of now, there are nearly two million Bitcoins on the centralized exchange reserves. Considering $500 million daily inflows into spot Bitcoin ETFs, Bybit reports that around 7,142 BTC will leave the exchange reserves on a daily basis. this suggests that the reserves will last only nine months post-halving.

“With this in mind, it’s unsurprising that Bitcoin’s price may continue to climb before the halving, or even afterward, as the supply squeeze propels the price to another new record,” Bybit report reads.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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