Bitcoin (BTC) Held by Exchanges Drop to a 20-Month Low Despite Price Pullback
The Bitcoin price might have pulled back from $12,473 of Aug 18 to below $12,000 but parallel news indicates that there are more holders that it was a few weeks ago. Seeking to capitalize on the current bull run — which is so far intact, the number of BTC held at non-custodial wallets is at a 20-month high as per a tweet posted on Aug 20 pointing to low selling pressure.
Bitcoin Holding Flows with Price
A majority of Bitcoin holders are sensitive to prices. Driven by the need to hold and rack in capital gains whenever prices expand, most prefer to control their stash by keeping private keys under lock and key rather than surrendering them to custodial exchanges.
Given the shift and the migration away from exchanges, it is highly unlikely for a Black Thursday event to occur as it did back in March.
Then, the prices of Bitcoin fell to around $3,800 as coronavirus began spreading across the world.
Ironically, Bitcoin which is touted as a store of value and a complementing asset which syncs with gold, fell as there were more idle coins at leading exchanges. The herd mentality and fear ended up crashing the Bitcoin price.
A Black Thursday Event Unlikely
From on-chain data, there are slightly over 2.6 million BTC held at exchanges. Compared to what happened on Black Thursday when 2.9 million coins were sitting idly at exchanges.
With ongoing aggressive accumulation, it appears as if the overall sentiment is bullish and miners expect prices ahead.
According to an on-chain analysis by Byte Tree, miners are net holders, preferring not to sell their coins. The Miner’s Rolling Inventory (MRI) on the last day is 84.21 percent with 186 BTC under the miner’s control.
Hash Rate High as Bitcoin Options Open Interest Rise
Besides, further hinting of stability is the high hash rate. At the time of writing, the Bitcoin network hash rate stood at 114 EH/s, down from 2020’s all-time highs of 139 EH/s as flooding in Sichuan province continues to disrupt Bitcoin mining operations.
Notably, the computing power dedicated to the network remains high, three months after Bitcoin halved, slashing miner rewards by half.
Other than on-chain metrics, traders are also confident. As per Skew, the total open interest for Bitcoin Options is up 6X from early 2020 to $6.1 billion. The higher the number of open Bitcoin derivative positions, the more the confidence and expectations of better prices.
As previously reported by BTCManager, technical indicators and candlestick arrangements suggest a strong Bitcoin price capable of printing new 2020 highs.