After the recent surge on August 23rd, Bitcoin (BTC) once again sharply pulled back and settled at the $26,000 level. While the sensitivity surrounding Bitcoin largely remains in a downward trend, on-chain data is signaling some optimism for investors.
BTC Reserves Hit Rock Bottom on Crypto Exchanges
According to on-chain data, the Bitcoin supply on crypto exchanges has dropped to its lowest level in the past 6 years. Currently, only a small portion of the circulating Bitcoin supply, approximately 5.8%, is held on crypto exchanges. This indicates the lowest level for the highest cryptocurrency by market value since December 17, 2017. Additionally, according to data provided by on-chain data platform Santiment, an average of 57,000 BTC transactions are regularly conducted on a weekly basis.
The decrease in BTC reserves on crypto exchanges during the overall market decline indicates that investors prefer holding instead of selling for potential future price increases. If this trend continues along with positive macroeconomic factors and a return of positive cryptocurrency market sentiment, it could lead to a significant price increase for Bitcoin.
Another positive indicator for the largest cryptocurrency is that Bitcoin whales have been accumulating lately following the market crash last week. Data shows that Bitcoin whales have accumulated BTC worth $300 million since the drop to $25,000.
All Eyes on Fed Chairman Powell’s Speech for Bitcoin and Altcoins
Bitcoin’s drop below the 200-day moving average in technical charts reflects the continuation of weakness. For now, the immediate support range for Bitcoin is between $25,200 and $24,800. Breaking this support range could result in a price drop to $20,500.
Currently, all eyes in the global markets are turned to Fed Chairman Jerome Powell’s speech at the Jackson Hole meeting, both for Bitcoin and altcoins. Clues will be sought in Powell’s statements regarding whether they will end the interest rate hike cycle or not.
On the other hand, the oppressive and obstructive regulatory approach of the US towards crypto companies continues to hinder market sentiment. Bitstamp, one of the oldest cryptocurrency exchanges, announced that it will suspend Ethereum (ETH) staking services for US customers starting next month amid the SEC’s approach to the market. Experts warn that the crypto market may remain under negative sentiment and selling pressure in the coming weeks or months until a clear regulatory and legal framework that guides the cryptocurrency market is established.