CentralCrypto2023-04-22

BTC is getting scarcity for next cycle?

Looking at the current BTC cycle, we see that cycle 4 differs from the others in several aspects mentioned in previous reviews. However, when it comes to exchanges reserves, we note that the poor performance of this cycle can be a very bullish sign: asset scarcity. Note in image 1 how the BTC amount has been decreasing during the cycle (-33% of the total that was in reserve at the end of cycle 3). The more scarcity we see in the market, the more expensive it becomes and the interest could picks up again. We can see in image 2 how the exchange reserves in USD tracks the price. This means that the Inflow is directly proportional to the price, evidence that the sentiment can play in favor of a new uptrend for the next cycle. In Parallel We have an outflow coming from BTC by miners reserves: Since the break of 30K, there has been a large outflow of the asset (more than 6 billion USD) coming from the miner's addresses (image 3) followed by a large decrease also in deposits coming from these wallets (image 4). As we can see, with the perception that the local top was reached and the breakout of the previous local bottom was achieved, possibly those BTC withdrawn served to take profits as we can see by the monthly SOPR (indicator remaining above 1)