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Critical Metric in Bitcoin Dropped 50% in 3 Months: What Does It Indicate? - Koin Bulletin
It is reported that in the Bitcoin (BTC) market, the amount of liquid Bitcoin has halved in the last three months, indicating that both selling pressure and demand have weakened.
According to Glassnode data, Bitcoin's "Hot Supply" metric tracks the moving coins over the past week. This metric has declined from 5.9% to 2.8% in the last three months, showing a decrease of more than 50%. This indicates that the available Bitcoin for trading in the market is decreasing and that the liquid supply is tightening. This contraction in supply shows that investors are avoiding selling.
Bitcoin inflows to exchanges
The daily inflows of Bitcoin to exchanges have also shown a significant decline. The daily amount of BTC entering Bitcoin exchanges has decreased from 58.6k BTC to 26.9k BTC, representing a 54% decline. This decrease indicates that both investor sentiment has worsened and buyers are behaving more cautiously.
In the cryptocurrency market, a decrease in such entries usually indicates less selling pressure but also signifies weak demand. As investors and traders start to make fewer transactions, market volatility also declines.