The bitcoin balance on exchanges has received a lot of attention during this bull run because the change in these balances sticks out.
If the underlying dynamics have not changed, and the exchange balance drop in 2016 and what followed in 2017 is an indication, the prolonged decline in exchange balances this time might be a set up for a major bull run.
The general bitcoin supply drop on exchanges has led many people in the community to talk about a supply shortage or even supply squeeze of bitcoin that will lead bitcoin’s price to inevitably shoot up at some point, when supply dries up.
I have calculated how much the supply has increased from the minimum to the maximum 344 days into each halving cycle; as of the time of this writing, we are now 344 days into the third halving .
This seems to be a substantial gap, as the gap not only is influenced by the bitcoin balance on exchanges but also by the increase in prices.
The maximum balance on exchanges in terms of USD this cycle has been on day 338 with roughly 2,395,780 bitcoin, which is substantially lower than on day one.
Following this, the bitcoin balance on exchanges is an essential metric during this cycle, which warrants a closer look to see where bitcoin is headed next and, as explained earlier, could be a potential setup for a major bull run.