Bitcoin withdrawal rate hits the highest in a year, according to a Bitcoin analyst

Bitcoin supply shock is on the rise, but no one has noticed it yet. According to Willy Woo, it is currently at the same rate as the last quarter of last year. The current withdrawal rate is facing a one-year high.

The current trading rate of between $30k-$40k suggests that we are heading to a bullish season.

Are we headed to another breakout?

According to Woo, a bitcoin supply shock may push out some bitcoin supply off the market as it favors the long-term players and not the short-term players. The bitcoin supply ratio is not balanced as the supply is only concentrated to few whales. The whales have been selling out their stock since February.

In Q4 of 2020, the bitcoin supply shock was caused by an inflation hedge as people were trying to adopt it as an inflation hedge. This was brought about by a new inflation reality brought about by the COVUD-19 pandemic. There was a lot of attention from the investment scene as many long-term investors, such as institutional investors, were stocking up on Bitcoin.

Are there new investors?

According to Glassnode, On-chain analytics, bitcoin adoption is on the rise. In 2021, there are up to 32,000 new users per day on average, which is a new all-time high.

Back in 2018, the bitcoin network user growth number increased to 40,000 before facing a lower correction. That’s an indicator that it did not have any new users buying bitcoin since they believed its price crash would make them experience losses.

According to Mercuryo, Ether may take up Bitcoin’s position soon. The London hard fork may accelerate this. The fork will lead to an upgrade to Ethereum 2.0, which will help increase investors’ confidence.

Bitcoin Transactions

Crypto Quant suggests that Bitcoin deposits on exchanges have been on a decline. The moment there was scrutiny on the currency, the withdrawals increased. Bitcoin has experienced a lot of politics; for instance, Binance was banned in the UK. China has also affected the crypto scene since it made a move to ban crypto activity in China. The comments by Elon Musk and his endorsement for DogeCoin also influenced Bitcoin’s performance in the market.

Image by Crypto Dimistified from Flickr.

Marcia

Marcia

Marcia is a real crypto enthusiast specialized in bitcoin and regulatory news.

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