Massive bitcoin sales are becoming less likely

Bitcoin addresses, especially the big whales, continue to accumulate Bitcoin. The number of BTC held on exchanges is at its lowest level in 6 months.

Did Bitcoin hit its lowest level after the collapse of crypto stocks in mid-May and the heavy blow inflicted by Tesla? There is no shortage of conjecture. For JP Morgan, a major indicator is BTC’s share of the overall cryptocurrency market. This ratio is still below 50%. However, in recent weeks, Bitcoin’s dominance has been growing. But there are other factors that need to be taken into account to determine whether the bear market is over such as the volume of Bitcoins held on exchanges. A large number of BTC on the crypto exchanges signals likely sales. However, this indicator is falling. According to Santiment, this is the lowest this number has been in months, since early January.

“The 6-month low is a promising sign, as it generally indicates a decreased risk of further major collapses in $BTC” the company analyzed in a Twitter post.

Bitcoin exchange flows, on the other hand, peaked in early May, about two weeks before the crash. The fall in the price of BTC was then quickly accentuated by massive panic selling by investors.

These intensified on May 19, dragging down the rest of the cryptocurrency market, which then lost $1.2 trillion. However, not all investors adopted the same strategy. Some, like the whales, were accumulating BTC instead.

This accumulation has continued in recent weeks, as Glassnode notes. Thus, investors are increasingly choosing to withdraw their assets from exchanges and transfer them to cold wallets.

The price of Bitcoin remains choppy, however, struggling to overcome the resistance of $36,000. The price is fluctuating between $30K and $35K. Some uncertainty therefore remains regarding the short-term fluctuations in the value of the crypto-asset.

However, several indicators encourage investors to be more optimistic. The adoption of Bitcoin in Latin America could cement BTC’s place as a means of payment and mitigate its volatility.

As for mining in China, which has been disrupted by the country’s ban on mining, it is moving towards a way out of the crisis. The mining industry has begun to relocate its activities to other countries.

Optimism is not unanimous, however. Analysts continue to warn of an uncertain short-term outlook. Many even believe that a further sharp correction in the price of Bitcoin in 2021 is likely.