BTC optimism sparks as exchange supply hits 6-year low By Crypto.news
BTC optimism sparks as exchange supply hits 6-year low
Crypto.news – breeds a wave of cautious optimism among traders following the breach above $28,000, as supply on exchanges hit a six-year low amid high whale activity.
Santiment highlighted this trend in its latest monthly report, pointing out several metrics compounding the renewed optimism. The report confirmed that as Bitcoin (BTC) surged past $28,000, traders held their breath, waiting to see if the momentum would persist.
Bitcoin has experienced numerous similar “breakouts” over the past years, often followed by mild corrections. However, this time, the optimism was palpable amid BTC’s 6.6% one-month increase.
Moreover, fueling this optimism were the substantial whale transactions, each worth over $100 million, witnessed in the final days of September. These whale movements, when combined with the dwindling supply of Bitcoin on exchanges, painted a promising picture.
Most large token transactions were contributing to the growing trend of self-custody, a development welcomed by crypto enthusiasts. Citing this data, Santiment noted that it was not surprising that October began with a 6-week high.
Per the report, the key to Bitcoin’s recent upsurge seemed to be the accumulation of three prominent BTC whale and shark tiers, specifically wallets holding 10 to 100 BTC, 100 to 1,000 BTC, and 1,000 to 10,000 BTC. This accumulation commenced at the beginning of September.
The bullish behavior of these whales and sharks, coupled with Bitcoin’s supply on exchanges hitting its lowest point since December 2017, instilled further confidence in the market’s upward trajectory.
In addition, Santiment called attention to Bitcoin short trades, which had been prevalent since mid-August. Notably, these shorts appeared to have halted after the first spike to $28,000 on Oct. 1.
Caution is advised
However, the possibility of shorts resurfacing, especially if Bitcoin plummets below $27,000, is not to be ruled out. This potential resurgence of shorts could add volatility to the market.
It is also essential to monitor trading volume, which had seen spikes in the past, often preceding local tops. Moreover, on-chain transaction volume warrants close observation, as sustained high levels could signal the sustenance of the bear market rally.
Intriguingly, “Uptober” has become the trending keyword on crypto social platforms, reflecting optimism for October’s impact on prices. While a positive sentiment is generally welcomed, Santiment noted the absence of more cautious expectations.
Despite the prevailing optimism, caution is advised. The next Bitcoin halving is six months away, and a careful watch on the Federal Reserve’s interest rate decisions is essential. These decisions can impact the crypto market. BTC is trading for $27,363 at the reporting time, up 0.46% today.