Bitcoin’s net position on exchanges indicates a declining supply with the recent price consolidation
After a hard 2022, the global crypto market saw a sigh of relief in January 2023. Bitcoin, the largest cryptocurrency by market cap reaped gains of more than 40% since January. Investors enjoyed the discount buying opportunity in the highly beaten-down assets. As of press time, the Bitcoin price holds near $23,190. The 24-hour trading volume rose marginally by 8% to $26,602,728,898.
According to on-chain matric, Bitcoin’s Off exchanges supply continues to rise to all-time highs. BTC’s net positions on exchanges indicate declining supply since the start of February
With the recent sideways movement in the price, it is imperative to analyze the on-chain metric to draw a hint for the probable near-future price action. An asset’s exchange net position is significant because a rise in value often precedes the asset being sold.
On the other hand, a decrease in value indicates that investors are transferring the asset from exchanges to place it in self-storage. It might indicate a change in price.
The above graph shows the decreasing supply of exchange. The price seems to cap the upside near $23,300.
From a technical perspective, the Bitcoin price indicates a sideways price action.
On the above chart, BTC price hovers in a short-term range of $22,590 and $23,900. The volumes declined as the price reached a higher level, further with the formation of the double top near the higher range resulting in the recent price correction.
Both the momentum oscillator, the Relative Strenght Index (RSI), and the Moving Average Convergence Divergence (MACD) are giving mixed signals with a mild bullish tone.
The price is expected to trade in the mentioned range until it breaks higher or lower level.
