Binance Research Says Bitcoin Sell Pressure Is Easing as Supply May Tighten

Bitcoin on-chain indicators suggest the amount of supply available for sale in the market is shrinking, Binance Research said.

In a recent report published on May 17, Binance Research said four key on-chain indicators point to easing supply pressure in Bitcoin.

About 60% of Bitcoin's total supply has not moved for more than a year, the report said. That indicates long-term holding has strengthened, reducing the amount of Bitcoin circulating in the market.

Bitcoin held on exchanges has also continued to decline. Binance Research said the share of Bitcoin supply held on exchanges fell to 15.0% from about 17.6% during the Covid-19 period. Based on that measure, the firm estimated that roughly 500,000 BTC has moved off exchanges. Markets generally view declining exchange balances as a sign of easing near-term selling pressure.

Indicators of speculative overheating also remained at stable levels.

Binance Research said the SLRV ratio, a measure comparing short-term and long-term holdings, is hovering near historic lows. That suggests excessive short-term speculation in the market remains limited.

The STH MVRV metric, which tracks profitability for short-term holders, has also recently climbed back above 1.0.

The indicator had remained below 1 for a considerable period since November last year. Binance Research said that means existing investors have re-entered a zone of unrealized profits.