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Potential Bitcoin Supply Squeeze As 4.85M BTC Exits Exchanges

Evaluating the Implications of a Potential Uptrend Driven by Short and Long-Term Accumulation Trends in Bitcoin Market

Mark Valerius by Mark Valerius
January 29, 2025
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Key Points

  • Nearly 5M Bitcoin (BTC) has left exchanges since 2020, indicating a strong accumulation trend.
  • Decreased selling pressure on exchanges could potentially trigger a significant price rally for Bitcoin.

Bitcoin Accumulation Trend

Bitcoin (BTC) is currently experiencing a strong accumulation trend, despite the price volatility between $91k-$105k. According to Joao Wedson, founder of Alphractal, a crypto analytics firm, nearly 5M BTC has been withdrawn from exchanges since 2020. This suggests that investors are opting for a holding strategy. He stated, “4.85M BTC have left Exchanges since February 2020! The Exchange Flux Balance shows a massive shift. Since 2020, the game has changed—everyone wants Bitcoin at all costs.”

Potential Price Rally

The significant outflows from exchanges imply a decrease in the number of BTC available for sale on centralized exchanges. This supply squeeze coupled with low selling pressure could potentially instigate a significant price rally for Bitcoin. IntoTheBlock, a blockchain analytics firm, observed that exchange flows have been negative for the past seven trading days, indicating ongoing accumulation.

During the same period, the cryptocurrency’s value dropped by over 7%, falling from $109k to $97k, before bouncing back to $100k. This suggests that the price dip was marked by strong bids capitalizing on the lower prices.

CryptoQuant noted a similar decrease in selling pressure on Binance, with the taker sell volume dropping significantly over the past week, suggesting short-term weakness among short-sellers. The analysis read, “As the influence of sellers diminishes, buyers may step in, potentially leading to a new upward wave.”

These factors combined suggest that a significant price rally could be imminent. The upcoming Federal Reserve rate decision could provide further insight into these expectations. However, BitMEX co-founder Arthur Hayes predicts a potential 30% drop to $70k-$75k in the near term, followed by a rally to $250k by year-end.

Tags: Bitcoin (BTC)

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bitcoin
Bitcoin (BTC)
Rank: 1
$ 104,843.09
Price (BTC)
Ƀ1.00000000
Marketcap
$ 2.08 T
Volume
$ 26.26 B
24h Change
0.75%
Total Supply
19.87 M BTC

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