The number of bitcoin held on exchanges reached its lowest level since November 2018, according to data from Glassnode.
If history is anything to go on, this means that less and less traders are planning to sell their bitcoin, which could in turn imply lower chances of a major market tubmle in the near term.
Want to buy Bitcoin, Ethereum and other crypto? Start here.
Bitcoin’s price rose strongly on Tuesday morning, touching a two week high above $54,000.
Bitcoin was up 8.2% to $54,001.77 at 8.50am London Time on Tuesday.
This rally has put the world’s largest cryptocurrency back above $1 trillion, and has revived bullish speculation across futures markets.
Funding increase signals volatility ahead?
Crypto analyst Lex Moskovski pointed to increasing funding rates to bolster this thesis, which have increased considerably overnight.
Typically, increasing funding rates means that volatility is likely due to the growing number of traders taking risky bets, which increases the probability for forced liquidations – aggressively driving prices.
However, futures liquidity-hunting only plays its role up to a certain point, and while volatility could be on the horizon it’s unlikely to change bitcoin’s trajectory due to ongoing institutional acquisition of the cryptocurrency.
Subscribe to the semi-weekly newsletter for regular insight into bitcoin and crypto. Go on. It’s free.
Join the telegram channel for updates, charts, ideas and deals.
Did you like the article? Share it!