According to a recent report by CryptoQuant, Bitcoin (BTC) investors have withdrawn a significant amount of their holdings out of cryptocurrency exchanges, indicating that noticeable HODLing activities are going on. The on-chain data provider asserted that there is a massive price leg up in the works, as sell pressure has dropped.
As is typical with every tradable asset, Bitcoin’s price is determined by the level of supply and demand acting upon it. In the crypto space, the significant availability of digital assets on exchanges connotes a risk of a possible selloff, as investors can quickly offload their coins.
That said, when there are fewer coins on exchanges, it means investor confidence in the cryptocurrency is high, and selling pressure is low. This was the metric the CEO of CryptoQuant, Ki-young Ju based his predictions on.
The executive highlighted that a significant amount of Bitcoin “flew out of crypto exchanges in the last several days.” As a result, Ki-young asserts that the benchmark cryptocurrency is ready for another leg up.
According to data presented by CryptoQuant, Bitcoin fell from $14k to around $9k over a few days in 2019, as the amount of BTC on exchanges was at significantly high levels.
The opposite scenario appears to be playing out. In late 2020, HODLers began withdrawing large amounts of BTC off exchanges, which coincided with the start of the current bull cycle.
Key BTC Levels to Watch — May 6
After a day of immense volatility, Bitcoin fell into consolidation through the early hours of today, ranging between $57.5k and $56.7k. However, the primary cryptocurrency witnessed a break into the $58,000 pivot zone but failed to plant a firm foot at the new 3-day high and fell back into the daily consolidation range.
That said, we expect to see a mild correction to the lower-$56k level over the coming hours, as bullish momentum weakens in the meantime.
Meanwhile, our resistance levels are at $57,500, $58,000, and $59,000, and our key support levels are at $56,700, $55,700, and $55,000.
Total Market Capitalization: $2.4 trillion
Bitcoin Market Capitalization: $1.06 trillion
Bitcoin Dominance: 44.3%
Market Rank: #1
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