The market is drying up!

There are a couple of interesting charts that may be a sign of things to come. First, check out this graph of Bitcoin reserves on exchanges. We are at historic lows. They have fewer and fewer reservations. And you know the basic principles of economics, scarce goods tend to go up in price.

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We can see the same in the ETH chart:

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The same does not happen with all Crypto. There are cryptos like Chainlink for example that do not have this tendency:

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And if you compare the price evolution of Chainlink with BTC or ETH in the last 6 months, you will see that there is a difference. BTC +84%, ETH +59%, LINK +14%.

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This is just an example, to name a few.

Now we are going to cross it with this other graph, about the velocity of circulation for BTC:

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What is velocity?

Velocity is calculated by dividing the trailing 1 year estimated transaction volume (the cumulated sum of transferred tokens) by current supply. Velocity is a metric that explains how actively money is circulating in the market.

As you can see, in October last year it reached its peak, just three months later BTC hit its current bottom. It is worth noting the rate at which this speed has been reduced, as you can see in the graph, the slope is large.

The reduction in speed, such as the lack of reserves, can have a significant impact on the price since a small movement, a small upward or downward pressure, can cause the price to move exaggeratedly, so the first impact should impact volatility, but the second, and perhaps the most important impact should be taken by the price.

We observed the same with ETH, although it reached its peak speed a little earlier than BTC, its trend is clearly bearish, although its slope is not as pronounced and is rather flattening.

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All this is worth knowing in a market where the dominance of BTC and ETH remains at maximums:

⚡️ Dominance :

  • BTC : 47.65 %
  • ETH : 18.81 %
  • Stables : 8.84 %

📈 Market Cap :

  • Total : 1.25T
  • DeFi : 48.1B
  • 24hr Vol : 40.64B

A couple of good reason to be optimistic.

Yours in crypto and AI