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Bitcoin is trading at the year’s highest levels, and according to a CryptoQuant report, the supply on centralized exchanges is at its lowest in six years.
Large Bitcoin holders usually transfer their Bitcoins to centralized exchanges when they intend to sell. When they accumulate, they withdraw these Bitcoins from the exchanges and transfer them to their own controlled solutions. Therefore, the low supply on centralized exchanges is often considered a bullish signal for cryptocurrencies and can indicate that investors may not be planning to sell their tokens in the near future.
According to the CryptoQuant report, Bitcoin could rapidly climb to between $50,000 and $53,000 in early 2024. The report pointed to the Metcalfe price evaluation band, which is based on data such as market value, trade volume, and user activity.
On the other hand, the report cautioned that 86% of the circulating supply is currently profitable, indicating that caution should be exercised.
The funding rate is a fee that helps to balance the price of a token’s futures contract with the spot price. If perpetual futures contracts are trading at a premium, long position holders will pay financing fees to short position holders, and the opposite is true if the situation is reversed.
According to a post by Global News Director Ali Martinez, Bitcoin has strong support at $42,700. This level is important according to technical analysis because 642,000 wallets have purchased 347,000 BTC at this level. If Bitcoin breaks the $42,700 support, according to Martinez, the next critical area to watch would be $38,000. However, if Bitcoin continues to move upward from its $42,700 trend, it could visit the next significant supply zone at $47,300.
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