According to a report from The Block, the Bitfinex Alpha report this week indicates a significant decrease in the inactive supply of Bitcoin that has not moved for over a year. This suggests that long-term holders are either continuing to reduce their holdings or moving their assets out of the exchange. Bitfinex analysts state that the proportion of Bitcoin that has not been traded for over a year is decreasing. The report also points out that the current behavior of Bitcoin holders reflects the situation before the significant increase in the Bitcoin market in December 2020, indicating that we may be entering a similar growth phase. The upcoming Bitcoin halving event, which occurs every four years and reduces the block rewards earned by miners, will slow down the growth rate of Bitcoin supply. According to data from CoinMarketCap, the halving event is expected to occur on April 20, reducing the block rewards from the current 6.25 BTC to 3.125 BTC. Based on historical trends, many Bitcoin price increases have occurred within 12 to 18 months after halving. Bitfinex has observed a decrease in the supply of long-term holders on exchanges, which aligns with data from CryptoQuant. The chart shows that the reserves of Bitcoin on exchanges have reached the lowest level recorded by CryptoQuant since the beginning of 2021. The reserve volume on exchanges fluctuated around 2.8 million BTC in July 2021, but it has now decreased to approximately 1.94 million BTC, indicating a decrease of about 862,000 BTC since CryptoQuant started tracking this indicator. After a significant price drop following large-scale liquidation in the past two days, some indicators, including funding rates, are now stabilizing, indicating that traders’ attention has shifted back to the upcoming halving. Timo Lehes, co-founder of Swarm Markets, believes it is necessary to exercise caution at this time as the halving event includes some forward-looking pricing of the market, which may lead to a pullback.
