Bitcoin Supply Drop Signals Upbeat Price Movement, Analyst Says

Christian Encila

10 months ago

3 mins read

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After its latest halving event, Bitcoin sent a positive signal throughout the crypto market. Historically, this big drop in supply has been connected to notable price gains, which has inspired investor hope.

The halving, which cut the rate at which new Bitcoins were made, has actually slowed the flow of new Bitcoins into the market. This sudden drop in supply, along with growing interest from institutions and wider use, is likely to push Bitcoin prices up.

Many investors are attentively observing these dynamics and expect a similar trend in the near future; previous halvings have sometimes followed significant price rebounds.

BTC price up in the last 24 hours. Source: Coingecko

Bitcoin: Changing Investor Attitudes

The substantial decline in the number of new deposit addresses on cryptocurrency exchanges marks a clear trend in the Bitcoin market. Data from the well-known analysis tool CryptoQuant shows that just 25,000 rather than 70,000 freshly registered Bitcoin deposits exist. This decline in selling pressure denotes a change in investor behavior towards holding rather than trading their Bitcoin.

Investors are unwilling to sell #Bitcoin

“A decreased willingness to sell assets could lead to a reduction in the supply of Bitcoin on the market, which, with steady or increasing demand, may cause price increases.” – By @AxelAdlerJr

Full post 👇https://t.co/HdipPeIh6h pic.twitter.com/jhNDHiSKst

— CryptoQuant.com (@cryptoquant_com) July 23, 2024

According to CryptoQuant analyst AxelAdlerJr, this decline in selling pressure denotes a change in investor behavior towards holding rather than trading their Bitcoin.

Such behavior shows that the market is mature. As investors gain more faith in Bitcoin’s long-term value, they trade less. They spend in a more stable way, which might make the market less volatile and more stable. This trend shows that buyers are beginning to see Bitcoin as an asset with value, not just a way to speculate, which is good news for the cryptocurrency.

Institutional Confidence And Market Psychology

As more and more investment firms are pouring money into Bitcoin, everything has changed. Big investment businesses and institutional investors provide the market legitimacy and security, which can affect how regular individuals think about investing. Big players may inspire trust and long-term thinking among smaller investors.

Bitcoin is now trading at $67,361. Chart: TradingView

This dynamic is much enhanced by behavioral economics. The activities and confidence levels of additional institutional investors entering the market might affect the sentiment of individual investors. This phenomena can result in a positive feedback whereby rising confidence stimulates more investment.

One important statistic emphasizing this change in investor attitude is the declining deposit addresses. It implies that anticipating better future prices, investors are less ready to sell their Bitcoin. Supported by both lower supply and higher demand from both institutional and individual investors, this line of thinking fits the growing conviction that the price of Bitcoin will keep rising.

Featured image from Pixabay, chart from TradingView

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.