What a bloody day on top of a bloody month for the king: B, T, C.
Four days ago, this article posted, with a misleading title:
**"Bitcoin Supply Shock: Only 12% Of BTC Supply Is On Exchanges Now"
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This implies that Bitcoin will be in short supply, and as we all know, with the law of supply and demand, that when something is in short supply and is also in high demand, the price of that item will skyrocket.
However, as we all witnessed today, Bitcoin fell 6.6% over the past 24 hours, and has fallen 47.2% from its all time high of $69,044.77 on November 10, 2021.
Let's step back, as 12% of the circulating supply of Bitcoin is still a lot. In fact, that is 2,272,383 BTC left on all exchanges.
So how much liquidated BTC does it take to make the price of BTC fall 6.6%?
Not too much, to be honest.
As you can see from the chart below, as of today, there is 1.72 million BTC left on exchanges
Don't let the picture fool you, because nearly a year ago, in February 2021 - even though, the picture makes it look as if there's a lot of BTC on exchanges relative to today - it was just a 2.1 million. That's only an 18% difference. Significant, but still enough BTC left on exchanges to allow a 6.6% drop.
If we look at today's liquidations, $987.95 million worth of BTC longs were liquidated, and $154.39 million worth of BTC shorts were liquidated, totaling $1.14 billion worth of BTC were liquidated TODAY!
With Bitcoin's price at $36440.20 at the time of liquidation, that equals to 31,348.35 BTC that was liquidated.
**31,348.35 BTC is FARRRRR less than the 1.72 million left on exchanges.
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**That means for today, it only took 1.82% of the BTC left on exchanges to be liquidated to drop the price of BTC 6.6%. OUCH.
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Ergo, relying on headlines about how little supply of BTC left on exchanges is NOT a good indicator that right now is a good time to accumulate BTC.
There's plenty of BTC left on exchanges, and it's worthwhile to look at other metrics to make a better and more informed decision on when to accumulate.
What other metrics do you look to find confirmation signals? Drop a comment below. I'd love to hear it.