- Bitcoin investors were moving their holdings from CEXs like Binance to self-custody
- Open interest increased while other on-chain metrics remained bullish
While altcoins suffered a massive blow last week as their prices declined by double digits, Bitcoin’s [BTC] price action was relatively stable.
According to CoinMarketCap, BTC’s price declined by more than 3% over the last week. At the time of writing, Bitcoin was trading below the $26,000 mark at $25,978.69, with a market capitalization of more than $504 billion.
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Balance on exchanges plummets
Santiment’s latest tweet revealed an interesting development for Bitcoin. As per the tweet, BTC’s supply on exchanges reached the lowest level since February 2018, suggesting that investors were accumulating BTC. Though an increase in accumulation is generally bullish, this time the scenario was a tad bit different.
#Bitcoin‘s exchange supply has now fallen to its lowest level since February, 2018. Traders continue moving $BTC to self custody during the uncertainty surrounding #Binance & #Coinbase. As long as these #SEC lawsuits loom, this trend should continue. https://t.co/CBOxJ8oA07 pic.twitter.com/c7MQyMswgp
— Santiment (@santimentfeed) June 14, 2023
A major reason behind this development could be declining trust in CEXs such as Binance and Coinbase. This happened as both the major CEXs had separate episodes with the United States Securities and Exchange Commission (SEC).
Caueconomy, an author and analyst at CryptoQuant, recently posted an analysis highlighting the aftermath of a decline in supply on exchanges. As per the analysis, the movement from CEX to self-custody helps to increase the adoption of self-custody.
However, it also decreases the volume of trading on these platforms, which in turn lowers the overall liquidity of the order books.
The case of BTC’s Open Interest
Coinglass’ data suggested that BTC’s price chart might continue to be red in the coming days. The possibility was revealed by BTC’s open interest, which registered an uptick on 6 June only to fall down on 7 June. However, as of 14 June, it moved in a sideways direction. Increasing open interest represents new or additional money coming into the market.
Metrics were bullish though
Though BTC’s open interest didn’t give a clear picture, its metrics told a different story. Bitcoin’s exchange reserve was decreasing, suggesting that the coin was not under selling pressure. Its binary CDD was green. The metric revealed that long-term holders’ movements in the last seven days were lower than the average.
Additionally, BTC’s funding rate was also high, reflecting its demand in the futures market. However, contrary to the above-mentioned sentiment, BTC’s fear and greed index had a score of 46, indicating fear among investors.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Surprisingly, according to Santiment’s chart, Bitcoin’s social volume plummeted sharply last week. A possible reason behind this could be last week’s altcoin crash, which made altcoins’ a hot topic of discussion in the crypto community. BTC’s weighted sentiment indicated that investors were not very confident in BTC as the chart remained in the negative zone.