Bitcoin is witnessing a significant decrease in addresses receiving incoming transactions, suggesting a notable surge in selling activity. According to data analytic firm, CryptoQuant.com, this decline has reached an astounding 80% over a period of 612 days, surpassing the previous record set during the 2017 parabolic top. Moreover, when measured from the May 2021 peak, the address decline rises to a staggering 84%.
Notably, CryptoQuant.com recently posted a series of tweets detailing the historic decline in Bitcoin inflows and supply:
"Largest Decline of Bitcoin Inflows and Supply in History"
— CryptoQuant.com (@cryptoquant_com) July 3, 2023
Quicktake Post by @1mrpapi
Thread🧵 pic.twitter.com/JKVi0lB3F9
The company’s research indicated that there has been a significant decrease in the number of addresses logging inflows since October 2021. The decline becomes even more pronounced, reaching 84% when measured from the peak of May 2021. This decline marginally surpasses the second-highest dip associated with inflows between the parabolic peak of 2017 and the bear market of 2018, which stood at 78.5%.
In addition, CryptoQuant’s analysis highlighted an intriguing shift in Bitcoin supply dynamics on exchanges. Despite brief spells of increased supply, the overarching trend since March 2020 has been a reduction in Bitcoin reserves on trading platforms, plummeting by over 30%.
March 2020 witnessed the highest-ever recorded Bitcoin supply on exchanges, marking the culmination of a decade of consistent growth. However, the subsequent 1200 days have seen a consistent reduction in supply in Bitcoin’s history.
CryptoQuant suggests these trends could indicate a long-lasting positive shift in Bitcoin’s perception. This is further bolstered by recent developments such as BlackRock and other Exchange Traded Funds (ETFs) filing or refiling and introducing new regulatory frameworks in key markets, particularly among G20 countries.
In conclusion, the data presented by CryptoQuant.com paints a compelling picture of a significant shift in Bitcoin’s supply and demand dynamics. The remarkable decrease in addresses receiving incoming transactions, surpassing previous records set during the 2017 peak, indicates a surge in selling activity and potential profit-taking by investors. Additionally, the consistent reduction in Bitcoin reserves on exchanges since March 2020, a first in the cryptocurrency’s history, suggests a potential shift towards a longer-term positive perception of Bitcoin as an asset.
