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For the cryptocurrency king, the last few days of September were not smooth. The drop in the Asian markets hit the cryptocurrency. Negative sentiments surrounding Evergrande, the hawkish stance of the Federal Reserve, and many other negative factors are undermining risk appetite. On the other hand, the supply of Bitcoin on exchanges is at its lowest level since 2018. So what does this mean?
Bitcoin Historical Data
The supply of Bitcoin readily available for sale on exchanges is at its lowest level since 2018. However, a popular cryptocurrency analyst claims that this may not necessarily be a good thing. In fact, he admits that he no longer sees it as a catalyst for price increases.
According to Willy Woo, the founder of the statistical platform Woobull, the "synthetic" nature of the Bitcoin balance on exchanges does not necessarily imply scarcity of the cryptocurrency.
"Does buying Bitcoin inventory on exchanges lower the price? No, it's a misunderstanding. That's been happening all of 2022. There's no supply shock because synthetic BTC inventory has increased through the futures market. When the futures market relaxes, the market rebounds."
Woo believes that the approval of a Bitcoin spot price exchange-traded fund (ETF) in the United States could be a "fix" for this issue.
Bitcoin's paper BTC doesn't push up prices.
Willy Woo expressed his views on "paper Bitcoin" at an event this month. Yes, this description highlights a fact that investors have been reluctant to acknowledge for a long time. Since 2019, futures trading has limited price performance.
Woo added that in early 2022, before BTC/USD reached its lowest level in two years at $15,600, futures trading distorted the market's perception.
"In early 2022, I saw an uptick in on-chain (spot) flows and thought the market was on the rise, while futures trading told a completely different story."
This analyst believes that driving spot prices is the direction of futures trading, and in order for the cryptocurrency king to experience another historic bull market, the approval of spot ETFs is necessary.
Can we talk about some good news too? Another analyst, Moustache, says that the current levels might be the last chance to buy at the bottom.
Moustache uploaded a chart comparing the current situation to 2020, highlighting the "intriguing" similarities in Bitcoin's relative strength index (RSI). This analyst says that 95% of investors do not expect the bottom to occur. These words actually remind people of the analyst's target of $2,000 for BTC in 2020, but the days when you couldn't buy it. |
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Post time 30-9-2023 09:05:18