The outgoing flow of BTC from exchanges responds to a better accumulation of holders. There are currently about 830,000 BTC on exchanges.

Inventories of bitcoin (BTC) on exchanges continued their path to decline and reached 13.2% of supply this last Thursday, which runs parallel with 2.49 million BTC. According to data from Glass node, BTC inventories reached this value in February 2018.

While the price in bitcoin (BTC) followed a declining path, inventories increased to their all-time high peak of 17.02%, recorded on March 20, 2020. This all-time high took effect a week after the widespread decline in markets.

Inventories got back to the value of 13.2% in just over three years and ten months. The big difference between the two dates is in the current market capitalization of bitcoin. Back on February 4, 2020, bitcoin was capitalizing at around $ 6,891, while the circulating one was at 16.84 million BTC. This situation means that the market capitalization on that date was USD 116,028 million.

At the time of writing this note, the market capitalization is USD 872,770 million, as the price of BTC is USD 46,171, while the current is 18.903 million BTC. The percentage of BTC in the exchanges gets back to the value it had three years and ten months ago, but its capitalization has grown at least 652% in that period.

According to an analysis by Willy Woo, the continuous departure of BTC from exchanges takes effect due to the accumulation of long-term holders, which, although it has not continued with an upward trend, remains at high levels.

Woo also highlights that regardless of the price correction that started after the all-time high peak on November 10, intensive purchases also took effect by smallholders, all of them with less than 1 BTC.

Woo and his Analysis

In his latest report on the bitcoin market, analyst Willy Woo highlights that, despite the declining price in recent weeks, the accumulation of long-term holders (LTH) maintains its position at high levels, among other indicators.

Consequently, according to the analyst, the market structure in the medium term is bullish. Woo highlights that despite the current price action, the underlying market structure shows zero signs of a bear market.

Also, the report states there is a slight increase in demand on bitcoin derivatives exchanges so, users would be in the presence of a bullish divergence, given the drop in prices. Woo added that this situation suggests that a bitcoin price bottom is forming.

Woo implements a system based on his creation to the valuation of bitcoin. The model, based on the supply shock, examines the BTC prices. The model managed to explore the BTC prices when the demand was similar to the current one, and from there, it extracts a valuation of BTC.

By: Jenson Nuñez


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