Bitcoin’s Supply Crisis: Is This the End of the Crypto World? đŸ˜±

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In the grand theater of cryptocurrency, where fortunes are made and lost with the flick of a digital switch, a curious phenomenon has unfolded. The so-called “Hot Supply” of Bitcoin, that elusive metric which once danced with vigor, has plummeted by a staggering 50%. What does this mean for the beleaguered souls who dare to tread this volatile path? Let us delve into the depths of this cryptographic conundrum.

Bitcoin Hot Supply: A Mere 2.8% Remains

According to the esteemed analysts at Glassnode, the Bitcoin Hot Supply has taken a nosedive over the past three months. This “Hot Supply” is not merely a whimsical term; it refers to the tokens in circulation that have been in motion within the past week. One might say it’s the lifeblood of the Bitcoin ecosystem, the most liquid of its kind, akin to a bustling marketplace where coins are exchanged with fervor.

Behold the chart below, a visual testament to the tumultuous journey of this supply over the years:

As the graph reveals, the Bitcoin Hot Supply soared to dizzying heights during last year’s bull rally, a time when traders were as plentiful as pigeons in a park. Yet, with the recent bearish winds sweeping through the market, this once-thriving indicator has seen a dramatic decline. From a high of 5.9%, it has now dwindled to a mere 2.8%. Glassnode notes, “This signals a sharp reduction in liquid BTC available for trade.” One can almost hear the collective gasp of traders everywhere.

But wait, there’s more! Another harbinger of doom is the Exchange Inflow, which measures the total amount of Bitcoin that investors are transferring to centralized exchanges. Generally, this is where holders deposit their tokens, presumably to sell them off like hotcakes. Thus, the Exchange Inflow serves as a barometer for sell-side activity in this chaotic sector.

Here’s a chart illustrating the Bitcoin Exchange Inflow, showcasing the ebb and flow of this metric over the years:

During the euphoric rally, the Bitcoin Exchange Inflow reached a staggering 58,600 BTC per day. Yes, you read that right—58,600 tokens were being deposited daily! Today, however, as the market has cooled to a frosty chill, this figure has plummeted to 26,900 BTC per day. Glassnode explains, “Lower inflows indicate reduced sell-side activity but also weaker demand.” It seems the party is over, folks. 🎉

And it’s not just the spot market that’s feeling the pinch. Glassnode has also pointed out that the Futures Open Interest—a measure of the total amount of futures positions related to Bitcoin currently open on exchanges—has experienced a notable drawdown since the price reached its all-time high (ATH).

Take a gander at this chart, which illustrates the decline in Futures Open Interest:

At its ATH, the Bitcoin Futures Open Interest stood at a robust $57 billion. Now, it has plunged to a mere $37 billion, a drop of 35%. Glassnode remarks, “This decline mirrors the contraction seen in on-chain liquidity, pointing to broader risk-off behavior.” One can only wonder if the crypto enthusiasts are now hiding under their beds, clutching their wallets tightly.

BTC Price: A Rollercoaster Ride

In a dramatic twist, Bitcoin managed to claw its way back above $87,000 yesterday, only to tumble back down to $85,000. Such is the life of a cryptocurrency—one moment you’re on top of the world, and the next, you’re face down in the mud.

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2025-03-21 19:14