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<div class="finbold">
 <p class="paragraph">The cryptocurrency exchange reserves of Bitcoin (BTC) reached record lows below 2 million BTC in early April. With now less than 10% of Bitcoin’s circulating supply, an increased demand has the potential to cause a supply shock.</p>
 <p class="paragraph">Notably, Finbold retrieved data from <em>CryptoQuant</em> on April 8 that shows 1.94 million BTC in all known exchange addresses. This represents around 9.8% of Bitcoin’s circulating supply of 19.67 million coins issued, by press time.</p>
 <p class="paragraph">The exchange reserves have been in a downtrend since a peak of 2.85 million BTC in July 2021. On that note, these reserves diminish as Bitcoin investors withdraw the coins from these entities’ custody. A decision that shows intent to hold Bitcoin and not actively selling or trading it.</p>
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 <p class="paragraph">Meanwhile, BTC trades at $69,892, challenging the $70,000 psychological resistance level.</p>
 <figure class="wp-block-image size-large"><img decoding="async" width="1024" height="514" src="https://cdn.thebittimes.com/images/2024/04/09/fffd90856e8183d722830ed8ea23f7af.webp" alt class="wp-image-167620" srcset="https://cdn.thebittimes.com/images/2024/04/09/fffd90856e8183d722830ed8ea23f7af.webp 1024w, https://cdn.thebittimes.com/images/2024/04/09/fffd90856e8183d722830ed8ea23f7af.webp 300w, https://cdn.thebittimes.com/images/2024/04/09/fffd90856e8183d722830ed8ea23f7af.webp 768w, https://cdn.thebittimes.com/images/2024/04/09/fffd90856e8183d722830ed8ea23f7af.webp 1536w, https://cdn.thebittimes.com/images/2024/04/09/fffd90856e8183d722830ed8ea23f7af.webp 1980w" sizes="(max-width: 1024px) 100vw, 1024px">
  <figcaption class="wp-element-caption">
   Bitcoin reserves in exchanges. Source: <em>CryptoQuant</em>
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 <h2 class="wp-block-heading" id="h-what-is-a-supply-shock-and-its-price-effects-on-bitcoin">What is a supply shock and its price effects on Bitcoin?</h2>
 <p class="paragraph">A Bitcoin supply shock occurs when the available supply of Bitcoin on exchanges suddenly decreases while facing an increased demand. Essentially, this can translate to a higher buying volume, with a lower selling volume, driving the prices higher.</p>
 <p class="paragraph">One of the factors that contribute to a supply <a rel="noopener noreferrer nofollow" title="shock" href="https://thebittimes.com/tag/shock.html">shock</a> is <a rel="noopener noreferrer nofollow" title="exchange" href="https://thebittimes.com/tag/exchange.html">exchange</a> <a rel="noopener noreferrer nofollow" title="reserves" href="https://thebittimes.com/tag/reserves.html">reserves</a> dropping through significant withdrawals. Consequently, the reduced supply available for trade can lead to a significant increase in Bitcoin’s price.</p>
 <p class="paragraph">Moreover, the Bitcoin halving event, which occurs approximately every four years, further exacerbates the supply <a rel="noopener noreferrer nofollow" title="shock" href="https://thebittimes.com/tag/shock.html">shock</a>. After the halving, the amount of newly minted and issued Bitcoins awarded to miners is cut in half.</p>
 <p class="paragraph">In particular, the <em>Bitcoin Magazine</em> believes a supply <a rel="noopener noreferrer nofollow" title="shock" href="https://thebittimes.com/tag/shock.html">shock</a> is imminent for Bitcoin in the joint of these factors.</p>
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    <p lang="en" dir="ltr">NEW: Only 1.7 Million #Bitcoin are left on exchanges.<br><br>With the coming halving, supply shock is imminent pic.twitter.com/Z58uKFNe01</p>— Bitcoin Magazine (@BitcoinMagazine) April 9, 2024
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 </figure>
 <p class="paragraph">Therefore, this reduction in new supply, coupled with the decreased Bitcoin reserves of exchanges, intensifies the economic effects. As a result, the heightened demand for BTC in the face of a dwindling supply has the potential to trigger a sharp rise in its price.&nbsp;</p>
 <p class="paragraph"><strong><em>Disclaimer</em></strong><em>: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.</em></p>
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/supply-shock-alert-bitcoin-exchanges-reserves-at-record-lows-tbt84948.html">https://thebittimes.com/supply-shock-alert-bitcoin-exchanges-reserves-at-record-lows-tbt84948.html</a></p>

Supply shock alert: Bitcoin exchanges reserves at record lows

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Alte articole publicate pe 9 apr. 2024

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