Likewise, it can show when investors are holding on to their bags and expecting the price of the digital asset to rally.
This has shown investor sentiment to be in the positive regarding the future of the asset, hence they are less willing to let go of their holdings in the market.
A recent report from Glassnode has shown that supply on centralized exchanges has continued to plummet in the fourth quarter of 2021.
Instead of dumping all assets in wait for the bear market, BTC being sold by investors are only so they could take strategic profits.
One thing to keep in mind though is that the market is nearing the end of this phase.
Expectations that investors would sell-off holdings at new all-time highs have been moot as outflows from exchanges have continued even after BTC hit a new ATH of $69K.
Glassnode noted that the volumes of BTC being sent to newly established wallets have climbed, with 516,914 recorded transactions involving these newly established wallets.
By then, it is speculated by market analysts that the price of the digital asset would hit a high of $100,000.
NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins.