Despite a month of no events for the Bitcoin (BTC) price, on-chain calculations show that Bitcoin may be sweeping an impending bullish wave. Notably, the number of bitcoins held on spot exchanges has declined since the start of the year, according to data from on-chain analysts, CryptoQuant and Glass node.

Cryptocurrency analyst Willie Wu pointed out that this change is very optimistic for Bitcoin as it indicates an increased demand for the asset and interest in using it as a store of value. Woo tweets:

“When coins go down on spot exchanges, it’s a sign that new buyers are coming to take coins from the markets and take them to HODL for cold storage. We are currently seeing new HODLers.

While the decline in the number of currencies held by spot exchanges could also indicate a massive migration to derivative exchanges, according to CryptoQuant, the flow from the former to the latter is also declining.

The flow of derivatives exchanges to restrict exchanges and hard portfolios may be exacerbated by recent lawsuits by the CFTC and the DOJ against BitMEX.

The current lag is 2017.

The trend of currencies held by spot exchanges began to reverse in early 2020, and this paints a familiar picture for traders. The decline is similar to the accumulation phase at the end of 2016, which in turn spurred the beef market in 2017 when the bitcoin price reached a permanent high of $ 20,089.

Both phases follow notable developments such as a possible Bitcoin ETF led by the Winklevoss twins in 2017 and the recent acquisition of business intelligence giant MicroStrategy. According to Wu, the market has not responded to these signs in the chain. twitter:

“This is one of the few times in my bitcoin career where the fundamentals (data and chain calculations from infrastructure operators) are in moon mode, but the market is not aware of it. They will be there by 2021. This is an opportunity that I haven’t seen since mid-2016. ”
Decline in DeFi gives way to Bitcoin

The depletion of BTC reserves on stock exchanges is an optimistic sign for Bitcoin from a macroeconomic point of view. However, some speculate that the changing trend may be a result of the growing popularity of DeFi and other liquidity protocols that have created the demand for Bitcoin tokens and the liquidity that comes with the original.

This should paint a positive picture for Bitcoin, as it shows that users prefer to have the advantage of owning BTC over making money. Although only through WBTC, the Ethereum blockchain contains about $ 1 billion in bitcoin, by the end of June 2020, the token version of Bitcoin began to gain traction.

Market value of WBTC. Source: CoinMarketCap
It also looks like Defi’s growth has stalled. Token prices have dropped, and the total value recorded in the DeFi protocols has continued to fall across the entire sector as well as the Bitcoin token versions.

The total value is insured with DeFi. Source: data on digital assets.
The current decline in the number of DeFi stakeholders has led many analysts to conclude that there is potential for a cyclical transfer of DeFi and altcoin revenue to bitcoin. In this case, it indicates that Bitcoin is planning a new rally competition, especially as new players continue to join the network.

Source: CoinTelegraph

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