Bitcoin price recovery to $30,000 likely with dwindling BTC supply on exchanges
- Bitcoin supply on exchange wallets has nosedived by nearly 15% to 1.13 million BTC since May 7.
- A significant decline in Bitcoin supply across exchanges signals a reduction in selling pressure on the asset.
- BTC is exchanging hands at $27,632, market participants are awaiting Bitcoin price recovery to the $30,000 peak seen in April 2023.
Bitcoin (BTC) price recovery becomes likely with the declining supply of the asset on cryptocurrency exchange wallets. Since May 7, there has been a 15% decline in the asset’s supply, which could potentially reduce the selling pressure on Bitcoin.
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Bitcoin on exchanges hits lowest ratio since December 2017
The amount of Bitcoin on exchanges has hit its lowest ratio in five and half years. Based on data from the crypto intelligence tracker Santiment, there is an increased interest in self custody and this has reduced the likelihood of BTC getting sold back to exchange wallets.
BTC supply on exchanges plummets
Interestingly, whales holding BTC have increased their activity as of May 9. A Binance-based Bitcoin wallet address that was dormant for a long time engaged in four transactions to move $2.26 billion worth of BTC out of the exchange.
BTC supply on exchanges declined from 1.32 to 1.13 million tokens over the past 48 hours, as seen in the chart below.
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Bitcoin supply across exchange wallets
Typically, a decline in exchange wallet reserves of BTC is considered a bullish sign, since the lower amount of the asset on trading platforms makes less of the crypto available for sale. This translates to lower selling pressure and a likely recovery in Bitcoin price.
Bitcoin price not out of the woods according to analyst
Despite the favorable on-chain metrics, technicals still point to a possible slide in BTC. Technical analyst at Castillo Trading argue that Bitcoin price is likely to witness short-term upside move before a correction lower.
BTC/USD Perpetual Inverse Swap Contract
The expert is eyeing three Point Of Control levels at $28,262, $28,977, and $29,398. The analyst’s target for Bitcoin is $30,769 before BTC price corrects lower.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
