The number of addresses depositing Bitcoin to exchanges and the supply available to trading platforms have been simultaneously decreasing over the past year. This trend can be considered a bullish sign for the Bitcoin market in the long term.
One of the active analysts in the CryptoQuant platform, named Papi, recently mentioned in a post that the number of bitcoin depositing addresses to exchanges and the supply to trading platforms are decreasing at the same time.
Pappy says that addresses depositing bitcoins to exchanges, either intending to sell on the spot market, or to raise capital for their trades in derivatives markets, and an increase in the number of these addresses is generally considered a bearish sign.
The number of addresses that deposit bitcoins to centralized exchanges has decreased by 80% since October 2021 (Mehr 1400) until now, i.e. during the last 612 days. Now, if we consider this index from its previous peak in May 2021 (May 1400), it must be said that the number of these addresses has decreased by 84 percent until today.
According to Pappy, the second largest consecutive decline in the history of the Bitcoin network dates back to the bear market of 2018, when the number of addresses depositing to exchanges fell by 78.5% in one period. This (intra-chain) analyst has introduced the recent drop of this index as a deviation from past historical trends and a bullish sign for the long term.
In addition, despite the periodic jumps in the stock of Bitcoin exchanges, the supply available to trading platforms has been decreasing in total since March 2020 (March 2019) and has experienced a 30% drop.
The stock of Bitcoin exchanges reached its historical peak in March 2020, while this index was growing continuously during the previous 10 years. In other words, the 1,200 days between March 2020 and today is the first period of continuous decrease in Bitcoin stock of exchanges in history.
Papi says this represents a steady and positive shift in public perception of Bitcoin, noting that “small and large investors are holding more Bitcoin today than ever before.”