- Bitcoin exchange deposits have hit a six-year low, marking the lowest level of BTC deposits in that time.
- That being said, HODLERS are key in preventing a drop to the $55K support.
Bitcoin [BTC] bulls faced another setback after a brief weekend spike that pushed BTC above $60K. With three consecutive red candles, BTC has retreated to $58K.
While analysts are split on whether $60K is support or resistance, a new CryptoQuant report shows Bitcoin exchange deposits have hit a six-year low of 132,100, signaling reduced selling pressure.
Could this milestone help BTC avoid a drop to $55K?
Drop in BTC exchange hints at rising hodler dominance
The chart reveals fewer Bitcoin exchange deposits, typically a bullish signal. Economically, reduced supply can inflate each BTC token’s value.
While for investors, less BTC on exchanges suggests confidence in price recovery.
Source : CryptoQuant
Moreover, AMBCrypto’s analysis shows that spikes in BTC exchange deposits typically align with BTC testing high price levels, indicating profit-taking strategies and often leading to steep declines, suggesting potential accumulation.
Conversely, fewer deposits point to increased control by long-term hodlers, as observed in the past six years since the last spike.
Put simply, the Bitcoin space is now dominated by hodlers confident in a price correction.
Source : IntoTheBlock
As expected, the hodler count has surged to 38 million, marking a staggering 375% increase from 8 million six years ago. Notably, hodlers holding BTC for over a year now represent 70.77% of total addresses.
Surprisingly, this percentage exceeds the count observed during the mid-March rally, when BTC hit its ATH.
In short, long-term holders are key to preventing a drop to $55K – but what are the odds?
The odds are intriguing
Currently, 58.27% of LTH are in profit, down from a peak of 74% on March 13—a 16% decline. Historically, a drop in the profit margin after hitting highs can signal a potential bear market months later.
Source : X
In short, while most LTH remain profitable, the weakening margin could suggest a slowdown or bearish trend ahead.
However, despite increasing losses since the March peak when BTC tested $70K, LTHs continued support indicates belief in a potential price correction.
If this trend continues, LTH might hold off on selling, as evidenced by reduced BTC exchange deposits.
Additionally, a potential Fed interest rate cut could drive BTC to a new ATH, assuming BTC deposits on exchanges continue their downward trend – Will they?
Time will tell
On the 30-day lookback period, LTHs sold a significant portion of their holdings for the first time on September 16th, coinciding with BTC’s retracement to $58K.
Source : Glassnode
As mentioned earlier, for a recovery, LTHs need to support their positions by avoiding further sales. However, this downtick was a rare occurrence, still aligning with AMBCrypto’s earlier projections.
Read Bitcoin’s [BTC] Price Prediction 2024–2025
If LTHs can prove this event to be an anomaly, and Bitcoin exchange deposits remain low, the door to a new ATH could still be wide open.
Conversely, if LTHs continue to sell, the $55K support may be at risk, and the path forward could become much more uncertain.
