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bitcoin

Bitcoin Deposit Activity Drops To Historic Low As ETFs And Long-Term Holding Gain Ground

Ash Tiwari
by Ash Tiwari
2 weeks ago
·
Posted in Bitcoin News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

As Bitcoin (BTC) continues to hold above the psychologically important $100,000 price level, a “true paradigm shift” is emerging among investors. Notably, exchange deposit activity is declining, signalling growing confidence in BTC as a reliable store of value.

Bitcoin Deposit Address Activity Plunges To Historic Lows

According to a recent CryptoQuant Quicktake post by on-chain contributor Darkfost, there has been a noticeable shift in the number of BTC wallet addresses depositing to exchanges since the 2021 bull cycle.

Related Reading: Bitcoin Shows Strength, But Binance Open Interest Divergence Flags Caution

The analyst shared the following chart to support their analysis. It shows a steady increase in the number of addresses depositing BTC on exchanges between 2015 and 2021, peaking at an annual average of approximately 180,000.

bitcoin
Bitcoin exchange depositing addresses have declined following the 2021 cycle | Source: CryptoQuant

However, this trend has sharply reversed since then and has shown no signs of recovery. Notably, the 10-year average for the number of addresses depositing BTC to exchanges currently sits around 90,000.

Shorter-term metrics reinforce this decline. The 30-day moving average (MA) is hovering around 48,000, while the daily figure has dropped to just 37,000. This drastic behavioral shift among investors can be attributed to two key factors.

First, the emergence of BTC exchange-traded funds (ETFs) has redirected a significant portion of demand away from spot exchanges. ETFs allow exposure to Bitcoin’s price performance without the complexity or risk of self-custody.

Second, retail participation has been relatively subdued in the current market cycle, naturally reducing the number of active deposit addresses.The analyst noted:

More investors, and now even companies, are adopting a long-term vision for BTC, choosing to hold it as savings or treasury reserves rather than actively trading it.

Is BTC Preparing For A New High?

As the number of addresses depositing BTC to exchanges continues to decline, several indicators point toward the potential for a new all-time high (ATH). Recent analysis by crypto analyst CryptoGoos suggests that short-term sellers are “getting exhausted,” implying that selling pressure may ease soon.

Related Reading: Bitcoin Rally Not Yet Euphoric? Puell Multiple Suggests More Upside

Similarly, the Bitcoin Rainbow Chart – a long-term valuation model used to identify overvaluation and undervaluation zones – recently flashed a “buy” signal. Although, the wider market demand remains weak.

Macroeconomic conditions are also turning favorable. An increase in the global M2 money supply is expected to benefit risk-on assets like Bitcoin. Some experts now predict BTC could rise as high as $150,000 as liquidity expands.

That said, not all signs are bullish. Miner-to-exchange transfers have recently spiked to historic highs, potentially signalling increased selling pressure from BTC miners. At press time, BTC is trading at $105,141, up 2.6% in the past 24 hours.

bitcoin
Bitcoin trades at $105,141 on the daily chart | Source: BTCUSDT on TradingView.com
Featured Image from Unsplash.com, charts from CryptoQuant and TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ash Tiwari

Ash Tiwari

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Ash is a seasoned freelance editor and writer with extensive experience in the blockchain and cryptocurrency industry. Over the course of his career, he has contributed to major publications, playing a key role in shaping informative, timely content related to decentralized finance (DeFi), cryptocurrency trends, and blockchain innovation. His ability to break down complex topics has allowed both seasoned professionals and newcomers to the industry to benefit from his work. Beyond these specific roles, Ash's writing expertise spans a wide array of content, including news updates, long-form analysis, and thought leadership pieces. He has helped multiple platforms maintain high editorial standards, ensuring that articles not only inform but also engage readers through clarity and in-depth research. His work reflects a deep understanding of the rapidly evolving blockchain ecosystem, making him a valuable contributor in a field where staying current is essential. In addition to his writing work, Ash has developed a strong skill set in managing content teams. He has led diverse groups of writers and researchers, overseeing the editorial process from topic selection, approval, editing, to final publication. His leadership ensured that content production was timely, accurate, and aligned with the strategic goals of the platforms he worked with. This has not only strengthened his expertise in content strategy but also honed his project management and team coordination skills. Ash's ability to combine technical expertise with editorial oversight is further bolstered by his knowledge of blockchain analysis tools such as Etherscan, Dune Analytics, and Santiment. These tools have provided him with the data necessary to create well-researched, insightful articles that offer deeper market perspectives. Whether it’s tracking the movement of digital assets or analyzing blockchain transactions, his analytical approach adds value to the content he produces, ensuring readers receive accurate and actionable information. In the realm of content creation, Ash is not limited to just cryptocurrency markets. He has demonstrated versatility in covering other emerging technologies, market trends, and digital transformation across various industries. His in-depth research, coupled with a sharp editorial eye, has made him a sought-after professional in the freelance writing community. From developing editorial calendars to managing content delivery schedules, he has honed a meticulous approach to project management that ensures timely, high-quality work delivery. Throughout his freelance career, Ash has consistently focused on improving audience engagement through well-researched, insightful, and relevant content. His ability to adapt to the evolving needs of clients, whether it's enhancing the visibility of digital platforms or producing thought-provoking pieces for a wide range of audiences, sets him apart as a dynamic force in the field of digital content creation. His contributions have helped to shape a well-rounded portfolio that showcases his versatility, technical expertise, and dedication to elevating the standards of journalism in blockchain and related sectors.

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