When we examine a few metrics related to Bitcoin, it appears that exchange reserves have dropped to 2018 levels. The stablecoin supply ratio is at 14.3, indicating that there is additional capital available for purchasing. The funding rate has returned to a neutral level following a pullback after reaching all-time highs.
The Bitcoin exchange reserve data shows that Bitcoin is being withdrawn from exchanges after seven years. The number of Bitcoins held on exchanges is currently around 2.43 million. During the 2021 bull market, this number was 3.4 million. The fact that Bitcoin is not readily available for sale suggests it is being held for the long term. A decrease in Bitcoin supply supports a potential price increase.
The Bitcoin stablecoin supply ratio stands at 14.3, indicating that there is purchasing power available even if the price of Bitcoin falls. The Bitcoin market cap to stablecoin supply ratio gives us this insight. As Bitcoin’s value increases, the SSR also rises, indicating reduced purchasing power and suggesting that Bitcoin may be overvalued. Since it hasn't yet reached 2021 levels, we can say that Bitcoin still appears to be undervalued. This suggests the bull market and buying pressure are likely to continue.
The funding rate had significantly increased alongside a momentum-driven price rise. This indicated that long positions on Bitcoin had become overly inflated and that buying pressure was too high—presenting a good selling opportunity for market makers. Following the ATH, funding rates saw a pullback and are now quite low, around 0.01–0.00. If this rate turns negative, it would signal an increase in short positions and potential upward price pressure.
Bitcoin exchange reserves have dropped to 2018 levels, signaling long-term holding. SSR at 14.3 shows strong buying power. Funding rates have normalized post-ATH, hinting at reduced long pressure. Overall data suggests continued bullish sentiment and price support.
Written by BorisVest
