According to market observers, the price of the flagship cryptocurrency Bitcoin ($BTC) could be “set to rally,” as the cryptocurrency’s supply on exchanges has already reached a three-year low.
According to data from Glassnode, which was first published by Bloomberg, Bitcoin’s supply across cryptocurrency exchanges has dropped to a three-year low, which according to Stephane Ouellette, CEO of FRNT Financial, could indicate that BTC is about to break out. According to reports, he said:
“If there’s a lot of BTC on exchanges, then people are ready to sell. If it’s off-exchange in private wallets, they could be less ready to sell. It’s a way of saying HOLDers are more in control.”
BTC Is Rangeabout: Market Analyst
Bitcoin has been trading sideways for the past few months, appearing to be trapped in a narrow trading range. Despite a sell-off when Russia invaded Ukraine, Bitcoin swiftly recovered and re-entered its trading range.
BTC is range-bound, according to market observers, not just because of the conflict in Ukraine, but also because of the concern around rising inflation and the hawkish posture taken by some central banks to limit its expansion.
The $47,000 mark has been identified as an important milestone to watch, as it is a break-even point for many new investors. BTC’s price is likely to stay within the current range until it breaks through that level, since short-term investors may sell any rebound to recoup losses.
BTC is in a discovery phase, according to Aoifinn Devitt, chief investment officer at Moneta, because the cryptocurrency has only been active for a little over a decade and hasn’t been exposed to a shock environment during that period.
We’re “finding out that it tends to be a very high-risk-reward asset that tends to sell off when risk is taken out of the equation,” according to Devitt.
Despite the range-bound fluctuation, some remain optimistic about the long-term prospects of Bitcoin. According to CryptoGlobe, Abra CEO Bill Barhydt stated last week that he believes the price of Bitcoin would reach $250,000 in the future, while Pantera Capital CEO Dan Morehead predicts a tenfold increase in the next five years.