BTC volume witnesses a historic plunge of 20% on crypto trading platforms

Bitcoin's volume falls by 20% on crypto exchanges.
  • The volume of Bitcoin that cryptocurrency exchanges hold recently witnessed a crucial plunge of about 20 percent over the last year
  • The fall in the amount of Bitcoin registered on exchanges hints that more traders are purchasing BTC and stocking it offline
  • This supply crunch is likely to be a constituent of Bitcoin’s scarcity

Cryptocurrency analysts platform Glassnode released fresh data documenting the graph of Bitcoin volume on cryptocurrency trading platforms. According to the details, the volume of Bitcoin that cryptocurrency exchanges hold recently witnessed a crucial plunge of about 20 percent over the last year.

The significant fall in BTC volume

The fall in Bitcoin’s amount on exchanges hints that more traders are purchasing BTC and stocking it offline. This could be a way to contribute to a BTC supply crisis.

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This supply crunch is likely to be a constituent of Bitcoin’s scarcity. In response to it, the price of BTC will increase. Over the last year, BTC’s price witnessed a surge from the value of $7,950 to roughly around $50,000.

The analysis of the investors’ behavior 

Glassnode’s research adds to the narrative that a surging number of traders invest in Bitcoin as an asset that represents store-of-value and holds the potential to work as a hedge against fiat inflation. Thus, it can be put parallel across as a form of digital gold.

The platform reflected the data from 6th March. The data shows that most Bitcoins that were bought initially in 2021 was not traded during the enormous market corrections that happened toward the latter half of February.

Glassnode’s Hodlwaves metric further supported these details and the belief that more Bitcoin traders are hodling for the long run. Hodlwaves highlights the amount of time that passed since a Bitcoin transitioned on-chain.

Hodlwaves data

According to the data published by Hodlwaves on February 22, 57 percent of Bitcoin’s transmitting supply has not moved since the past year. This implies that 57 percent of Bitcoin started circulating more than a year ago, and they are still static.

Besides, one-third of the BTC that is static for the past one year has also been possibly static for over five years. This indicates that a significant section of circulating Bitcoins is permanently lost.

The Bitcoin Fear and Greed meter measure the possibility of Bitcoin hodlers of selling (fear) or holding (greed) their Bitcoins. The current status of the meter reflects a position of extreme greed.

An important part of Bitcoin’s migration off trading platforms is likely due to the surged popularity of decentralized cryptocurrency trading platforms and DeFi protocols that facilitate their customers to earn income from loaning out their BTC.

However, the volume of actual BTC employed in DeFi protocols seems to be witnessing a quite sharp drop recently. Reports from DeFi Pulse reflect a fall in the locked value of BTC in the DeFi space from 50,000 BTC a month ago to just 34,140 BTC now.

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Andrew Smithhttp://thecoinrepublic.com
Andrew is a blockchain developer from his education and developed his interest in the cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer.

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