Exchange-related deposits and withdrawals of Bitcoin are often good indicators of market sentiment.
When the number of exchange deposits grows, the liquid supply of Bitcoin grows and shows the market’s readiness to trade. Conversely, when the number of exchange withdrawals increases, investors seem less interested in trading and are looking to hold their BTC off exchanges.
Looking at these exchange-related transactions against the total number of Bitcoin transactions can show whether the market is gearing up for a bull run.
In February 2023, the total number of Bitcoin transactions surpassed 307,000, reaching a two-year high, data analyzed by CryptoSlate shows,
Previous transaction number peaks correlated with Bitcoin’s price rallies. The 400,000 transactions recorded in late 2017 helped fuel the bull run that pushed Bitcoin to its all-time high of $20,000. Around 80% of all Bitcoin transactions at the time were exchange-related, with the majority being exchange deposits.
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