- Bitcoin’s exchange reserve dropped progressively during February.
- The number of whale entities increased by nearly 4% over the past month.
Nearly 50,000 Bitcoins [BTC] were withdrawn from centralized exchanges throughout February, causing a sharp dip in the world’s largest cryptocurrency’s “available to buy” supply.
As analyzed by AMBCrypto using CryptoQuant’s data, Bitcoin’s exchange reserve dropped progressively during the month, even as its market price spiked by 44% at the same time.
Source: CryptoQuant
Why this is a bullish signal
Typically, a drop in exchange supply implies reduced selling pressure and a potential shift towards other activities, like becoming long-term holders.
Additionally, as more Bitcoins were accumulated and locked away in self-custodial and cold wallets, it created a scarcity in the market. As per the supply-demand dynamics, this was a major bullish signal.
Bitcoin whales rise in number
Another significant reflection of the broader hoarding mentality was the sharp increase in the number of institutional investors, also referred to as whales of the crypto market.
The number of unique entities holding at least 1k Bitcoins increased by 55 during February. This represented a nearly 4% jump over the previous month.
Source: Glassnode
The launch of several exchange-traded funds (ETFs) tied to the spot price of Bitcoin opened the gates of the crypto market for TradFi investors in the U.S.
The game-changing event led to bullish forecasts, with one research pegging Bitcoin to grow to $100,000 by the year-end, and close to $200,000 by the end of 2025.
It was likely that whale investors were motivated by these optimistic predictions to stockpile Bitcoins.
Where is BTC headed to?
Over the last week, Bitcoin rallied as high as $64k. This raised hopes of an inevitable recovery to its all-time high (ATH). Profit-taking pulled the king coin to $61.8k as of this writing.
Read Bitcoin’s [BTC] Price Prediction 2024-25
However, the asset was still about 20% higher on a weekly basis, according to CoinMarketCap.
The market was in a state of “Extreme Greed” as per the latest reading of Bitcoin’s Fear and Greed Index. This suggested a fair degree of FOMO amongst market participants, leading to upsides in the days ahead.
Source: Bitcoin Fear and Greed Index