In a tweetstorm, the analyst who uses Dilution Proof exposes a number of clues that the world’s largest crypto asset by market capitalization is seeing a massive influx of purchasing power.
Dilution Proof points out that Bitcoin’s monthly close was accompanied by large amounts of exchange withdrawals, indicating that investors with deep pockets are buying BTC.
The analyst too observe that the value of BTC continues to rise against a backdrop of declining Bitcoin equilibrium on exchanges, suggesting that the main crypto asset is being pulled from the market and creating a supply crisis.
“So, is there still a demand for bitcoin?
Short answer: yes
A little longer answer: let’s look at some trends
Perhaps the most famous is the decline in currency balances since last year’s COVID-19 market panic, and overall it is still intact. “
Dilution Proof adds that exchanges aren’t the only ones experiencing a sharp reduction in the supply of BTC.
“A similar trend can be seen in over-the-counter (OTC) trading desk balances. The supply shortage is real; there is a decrease in the number of coins in circulation in the market, which means that the price must increase to entice HODLs to sell. ”
The trader notes that Bitcoin has witnessed a drastic decrease in liquid market supply, suggesting that illiquid BTC, or Bitcoin that is in the hands of long-term HODLers with little to no history of selling. , is growing.
The on-chain analyst also examines the sharp increase in stable currency reserves on spot exchanges, indicating that traders are on hold with large amounts of capital, waiting for an entry point to place their longs.
The dilution evidence concludes by saying that now that BTC has undergone a technical correction, most market cycle metrics point to more room for growth.
“Compared to 2017, the bull run has been intense; some exhaustion was normal
– The market was (over) indebted, but less now
– Demand for Bitcoin seems stronger than ever
– If this cycle is like the others, there is room for growth on most market cycle indicators.
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Image en vedette: Shutterstock / Roman3dArt