Some of these posts are terrible. Sometimes I see on reddit how a supply crunch is coming soon because the total balance of BTC on exchanges has been decreasing even though the number is still very high and it does not tell us anything really. If the price doubled today by some magical reason a lot of new supply would move to exchanges.
I agree with this. There was a time when Glassnode in their newsletter all the time predicted a bullish movement because of decreasing exchange volume. And what happened was often the exact contrary ... because exchange volume decrease often hints that there is less interest to trade Bitcoin and also to buy Bitcoin. The coins leaving the exchanges may be those moved by DCA buyers and "believers", while "fresh" demand simply doesn't arrive, with more supply than demand at exchanges as a result.
I didn't know about those. Dunning kruger example of false expertise I guess? I have no idea otherwise why they would write things with such certainty when there is no prior proof that they work.
The only situation where exchange volume may matter is in situations of massive panic, because the exchange supply then determines the magnitude of an instant crash. If you have to transfer the coins to the exchange to sell them, it's more likely you may think about selling twice.
Yes, for more specific situations like that it can tell us something. It is mostly people who regularly store coins on exchanges that are among the panic sellers. If you have a very strong cold storage setup it is very unlikely that you will go and do everything needed to move the coins just because the market is panicking.
The supply/demand dynamic in the case of Bitcoin is quite complex, and in most cases people who make comparisons like the OP are comparing apples to oranges.
Yeah, I mean a supply crunch is not impossible but not in the current situation and with the current supply of available BTC on the markets. We would need to get a lot of diamond hands people who don't basically plan to sell ever before we can consider a chance of this happening.
It may be the case however (and is quite likely) that institutional demand currently is superior than institutional supply, simply because institutionals entered the market massively only from 2024 on, and they tend to hold longer than other actors. But old hodlers and whales were very active selling Bitcoin (adding to the supply) in these last bullish months, for example in news like
this one. Which is expected because they have probably made fantastic profits.
Massive profit! Though I don't fully understand these moves unless the whales or old hodlers have another big bag of coins. There is no better thing than Bitcoin out there right now and there probably won't be for a long time. I can understand building a bit more diversified portfolio but going back fully to fiat? That's crazy.
