Bitcoin Supply on Exchanges Slip to Lows Last Seen in May 2019 Amid the Lightning Network Recording Exponential Growth
Bitcoin (BTC) supply on crypto exchanges has been nosediving because it hit a 28-month low.
Crypto analytic firm Santiment explained:
“The supply of Bitcoin sitting on exchanges has fallen to levels not seen since May 2019. This is a solid indication of less sell-off pressure for BTC.”
This metric shows that Bitcoin outflows from exchanges have been on an upward trajectory for more than two years. This signifies a holding culture because BTC is transferred to cold storage and digital wallets for future purposes other than speculation.
Recent research by on-chain metric provider Glassnode illustrated that a large portion of BTC supply was kept in cold storage. This was founded on the fact that dormant BTC supply had bottomed out at 54.2% for at least one year.
The BTC Lightning Network experiences remarkable growth
Days after the Bitcoin Lightning Network hit a record high capacity of 2,738 BTC, equivalent to $116.3 million in value. Its capability has scaled to a new all-time high (ATH) of 2,904 BTC.
Yann & Jan, Glassnode co-founders, explained:
“Bitcoin Lightning Network metrics continue hitting all-time-highs this week. Lightning Node count hits 15.6K Total channel count is up to 73K channel capacity is up 22% in Sept to 2,904 BTC.”
The Lightning Network is a second layer incorporated into the Bitcoin blockchain to undertake off-chain transactions. As a result, micropayment channels are utilized to scale the blockchain’s capacity to carry out transactions more efficiently.
Therefore, transactions undertaken on lightning networks are more readily confirmed, cheaper, and faster than that processed on-chain.
Will a reversal trend be witnessed on the Bitcoin network?
Bitcoin was down by 4.91% in the last 24 hours to hit $41,803 during intraday trading, according to CoinMarketCap. BTC’s price has been dropping ever since the leading cryptocurrency experienced a $10K daily loss earlier this month as over-leverage factors dominated.
Market analyst Lark Davis acknowledged that lower highs were continuously being formed on the Bitcoin network, and there was no sign of a trend reversal yet.
Lower highs and lower lows signify a downtrend, whereas higher highs and higher lows depict an uptrend.
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