According to Sentiment, the quantity of Bitcoin (BTC) and Tether (USDT) on major exchanges has been steadily declining over the last month.
Reduced Supply Could Indicate an Upcoming Price Increase
According to analysts, the decrease in Bitcoin supply on exchanges should be seen as a warning that the world’s most expensive cryptocurrency is about to reclaim the $45k level.
According to the website that analyses on-chain and social analytics, Bitcoin’s exchange supply has been dwindling for some time. However, in the case of Tether, the supply reduction began earlier this month.
Historically, a decline in the supply of tether was typically attributed to large-volume Bitcoin traders withdrawing funds from exchanges in order to alleviate selling pressure on Bitcoin. This approach frequently resulted in a vertical price surge for Bitcoin.
Lugano Is Pursuing the Status of Europe’s Crypto Capital
The decline in the supply of Bitcoin and Tether on exchanges coincides with rumors that the city of Lugano is considering legalizing a variety of digital currencies, including Bitcoin and Tether.
The Swiss city of about 62,000 citizens will be able to pay taxes, tuition fees, and public service costs using both Bitcoin and Tether.
Additionally, the city plans to construct a physical hub for cryptocurrency and blockchain firms. Additionally, the city will establish a multimillion-dollar fund to assist in financing those firms.
Russia’s Invasion of Ukraine Has the Potential to Accelerate Bitcoin Adoption
Meanwhile, Russia’s ongoing conflict with Ukraine is illuminating cryptocurrencies in an unexpected way. There is talk that Russia may resort to Bitcoin in order to circumvent US and European Union sanctions (EU).
Ukraine has already received over $45 million in financial assistance in the form of cryptocurrency from individuals worldwide.
Unintentionally, the fight may result in a higher acceptance of cryptocurrencies as legitimate forms of investment and trade.
The Market Performance of Bitcoin and Tether
While 2022 has been a challenging year for crypto, the decline in Bitcoin and Tether’s exchange supply may indicate that both crypto heavyweights are increasingly breaking market trends.
Tether was trading at $1.00 at the time of writing, with a 24-hour trading volume of $63.2 billion.
The token currently had a market capitalization of little more than $79.5 billion, making it the most valuable stablecoin and the third largest cryptocurrency overall.
Bitcoin, on the other hand, is currently trading at $41,723, down 3.77 percent from earlier levels. The token recorded trading volumes of $28.9 billion in the past 24 hours, and its live market cap of close to $791 million makes it the world’s biggest cryptocurrency by a large margin.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.