CryptoQuant: Bitcoin exchange deposit addresses reach multi-year low, indicating possible easing of selling pressure
The Bitcoin exchange deposit address indicator, compiled by CryptoQuant, a blockchain data analysis company, is at its lowest level since 2016, which may indicate a decrease in selling pressure.
The Bitcoin exchange deposit address indicator represents the number of addresses that send incoming transactions to centralized exchanges. According to a recent research report by CryptoQuant, the number of deposit addresses has dropped to 132100, the lowest level in many years. Its analysis suggests that this multi-year low indicates a decrease in the number of investors selling Bitcoin on spot exchanges, which may mean a decrease in selling pressure.
CryptoQuant research leader Julio Moreno said in an interview with The Block, "Generally speaking, seeing a decrease in deposits to exchanges may indicate a decrease in selling pressure, as there are fewer bitcoins available for sale
However, Moreno added that when the amount of deposits being made to the exchange decreases, it may not only indicate that people are less interested in selling their Bitcoin, but also mean a decrease in overall demand for Bitcoin, as fewer and fewer traders deposit to bet on price increases. He explained:
Some traders deposit on derivative exchanges to open long positions, betting on price increases. In this regard, a decrease in deposits may also mean a decrease in demand for Bitcoin
Another indicator also shows the decreasing monthly supply of Bitcoin liquidity in centralized exchanges. According to CryptoQuant's data, the number of bitcoins in centralized exchanges has decreased by about 470000 since the beginning of this year, a decrease of about 15% from January to September. This trend is reducing the liquidity supply of Bitcoin and may indicate that investors are withdrawing their Bitcoin as part of a long-term holding strategy.
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