Bitcoin & Ethereum On-Chain Data Indicates We Might Have Reached The Bottom
- Bitcoin outflows from exchanges slows down
- Demand for crypto-assets is back
- The number of active addresses for USDT is strongly positive again
After breaking the five-month winning streak of Bitcoin, June saw the price dropping to as low as $9,050 on Bitstamp. Last week especially, Bitcoin remained around $9,500 that has the analyst calling out for a bigger drop to $8,500 if BTC/USD doesn't manage to make it way upwards.
On July 27th Bitcoin price dropped $600 within an hour and in the following three days $248 million worth of BTC left the exchanges, with the outflow outpacing the inflow by 85%.
Following this decrease in the supply for BTC, the price started showing a positive trend. Yesterday, we jumped back to five digits and above $10,000.
Similarly, Ethereum dropped 6% the same time as BTC but unlike the flagship cryptocurrency, $27 million worth of Ether made its way into exchanges, with the inflow outperforming the outflow by 56%.
Though short term price bear projection for Bitcoin isn’t over yet, given the fact that August has been a bad month for the leading cryptocurrency historically, on-chain data suggests we just might have hit the bottom.
Bitcoin Outflows From Exchanges Slows Down
The data related to transactions to and from exchanges provide a good indication of the supply and demand of an asset, with an increase in the outflow from exchanges means decreased supply while an increase in the inflow of stablecoins to exchanges means increased demand.
Exchange flows have decreased across the board in comparison to last week with BTC inflows dropping from -40% last week to -24% this week and BTC inflows falling -34% last week to -12% this week.
Demand for Crypto-Assets Is Back
When it comes to stablecoins, $60 million worth of USD pegged crypto-asset left the exchanges, showing little demand for buying digital currencies, during the three days until July 27th.
Three days after July 27th, however, $31 million were moved into exchanges, indicating a growth in demand for cryptocurrency.
The on-chain volume of stablecoin follows last week’s pattern and dropped by another 20 percent following last week's 17% drop.
However, the number of addresses for USDT, the most controversial yet popular stablecoin with the highest volume is strongly positive again.
“Dare we say, on-chain data indicates that we have reached the bottom!,” comes TokenAnalyst’s response on the back of this positive data.