Bitcoin Faces Selling Pressure as $2.2 Billion BTC Floods Exchanges

In a recent post on X, analyst Ali Martinez discussed the latest trend regarding Bitcoin Supply on exchanges. "Supply on exchanges" here is an on-chain indicator from the analytics firm Santiment, which follows the total amount of BTC held in wallets connected to centralized exchanges.

When the value of this index increases, it means that holders are sending a net amount of tokens to these platforms. Since one of the main reasons investors turn to exchanges is to sell, this trend may have a negative impact on the value of the coin. On the other hand, the bearish indicators suggest that investors are withdrawing funds to self-managed wallets. This trend could be a sign that the network is witnessing accumulation, and this could naturally be a bullish signal for cryptocurrency. Here is the chart shared by the analyst showing the trend of Bitcoin supply on exchanges over the past few weeks:

As shown in the chart above, the supply of Bitcoin on exchanges has recently increased, implying that investors have created a net inflow of funds. In total, holders have transferred 20,000 BTC into the wallets of these platforms over the past two weeks. At the current exchange rate, this amount is worth up to 2.2 billion dollars. The timing of this deposit coincides with a drop in cryptocurrency prices, so it is likely that many of these funds were made with the intention to sell. In the same chart, Martinez also attached data on the Inflow of the exchange, showing all inflows to these platforms, not just the net inflow. This indicator recorded a significant spike over the weekend, after which BTC continued to decline. Interestingly, the supply on exchanges did not increase during this spike, indicating that the demand for cryptocurrency withdrawals was sufficient to balance the amount of deposits. Speaking of the flow of money into the exchange, short-term Bitcoin holders (STH), those who bought in the last 155 days, have suffered significant losses recently.

STHs are made up of the weak hands in the market, so it’s no surprise to see them capitulate when prices drop. In fact, their large loss spikes help Bitcoin find a bottom as their coins are transferred to more resilient entities.