BTCBitcoinNeutralBitcoin

7/21/2023 on

Bitcoin exchange balances are down to levels last seen around the start of 2018

Bitcoin exchange balances are down to levels last seen around Jan/Feb 2018. Exchange balances declined by about 32% from its peak in Mar 2020, down from 3.1 mio to 2.1 mio $BTC. 11% of the circulating supply is currently on exchanges (on Mar 13, 2020, 17%). The unprecedented trend of declining Bitcoin exchange balances continues. Some of it may be related to the usage of alternatives such as DEXs and funds not covered in the data, but overall there appears to be a common trend of people taking their bitcoin off of exchanges.  

BTCBitcoinNeutralBitcoin

6/5/2023 on

365-day moving average of Bitcoin exchange in-and outflows in macro downward trend

Both Bitcoin exchange in- and outflows have been in a macro downward trend since the bull run in 2017, considering the 365-day moving average. It picked up during the last bull run but was not as strong as in 2017. Overall an unusual trend as before 2017 the trend has been upward. Reasons may be: -decline in activity due to bear market (but does not explain overall trend) -diminishing use of bitcoin for speculative purposes due to: a) increasing availability of other trading pairs, such as stablecoins and b) a change in the composition of bitcoin users, with fewer users using bitcoin for speculative purposes and short-term trading. Both overall, leading to fewer deposits to and withdrawals from exchanges.  

BTCBitcoinNeutralBitcoin

5/25/2023 on

Bitcoin miner to exchange flows in general downward trend

The amount of bitcoin send to exchanges by miners is in a clear downward trend when looking at the 365-day moving average and the 7-day moving average. Both are trending lower since the last bull run. Part of that may be miners increasingly conducting over-the-counter deals instead of selling on exchanges. In that case, the selling pressure has just shifted elsewhere. Another factor is the professionalization of the mining space, with more and more companies that are potentially well-capitalized and have less pressure to sell their mined bitcoin to cover their operating costs at the moment. For example, Marathon increased its bitcoin holdings by 20% from 9,673 BTC in March 2022 to 11,568 BTC in March 2023. Still, they sold 600 BTC in April to support monthly operations etc. The professionalization may have also led to a shift from exchanges towards over-the-counter deals not showing up in the data. But on average, it seems reasonable to assume that part of that decline in the data is due to reduced selling pressures by bitcoin miners.  

BTCBitcoinNeutralBitcoin

2/22/2023 on

Bitcoin starting to be negatively correlated to the S&P 500 after quite some time

Bitcoin is showing a negative correlation to the S&P 500. It has been some time since we have seen that. The last time it was significantly negative was around the FTX crash in November. Then it was mostly bitcoin pulling away to the downside; recently, it has been more to the upside. But today, Bitcoin is down while the S&P 500 is slightly up. It will be interesting to see how long the negative correlation lasts and whether it will predominantly be to the upside or not. Note: The time period used to calculate the correlation is 20 days.  

Yield curve inversion and monetary policy by the Fed

Once the US yield curve inverts, it takes the FED some time to cave. In the latest history, that reaction window lengthened by quite a bit: Inversion to interest rate top: 02. Jan 89: 21 weeks + rate hikes 31. Jan 00: 43 weeks + rate hikes 05. Jun 06: 72 weeks + rate hike We are currently 22 weeks into the yield inversion and have yet to see the Fed showing signs that they intend to pivot. Considering that year-over-year inflation in the US is still at 7.7%, that likely is still some time away. If history is a guide, the Fed will hike a few more times and then keep the interest rate at that higher level for a prolonged time before lowering it again. Just going by the graph, that time window has lengthened as well. Note: In 2006, it is hard to pinpoint the exact time of the yield curve inversion as it hovered below but close to zero for some time and even went slightly above zero at times. So rather use the weeks to get an idea of the duration and don't take them too literal.