As supply shock tightens its grip on Bitcoin and Ethereum exchange reserves, they continue to fall.

The supply shock continues to tighten its hold on Bitcoin and Ethereum exchange balances, according to data.


Exchange Reserves of Bitcoin and Ethereum Are Declining

Both Bitcoin and Ethereum continue to see declines in their exchange reserves, as a crypto trader pointed out in a tweet.

The exchange reserve of an asset is a metric that displays the total number of coins in controlled exchange wallets.

Investors are sending more of their assets to exchanges to withdraw cash or purchase altcoins as the metric's value rises. A trend like this could point to market selling pressure.

A decline, on the other side, would indicate that investors are withdrawing their coins for hodling or OTC trading. Bitcoin and Ethereum exchange reserves have fallen by 1.2 percent and 1.5 percent, respectively, over the last month.


Supply Shocks in BTC and ETH

Both Bitcoin and Ethereum, according to the prevailing narrative, are experiencing a supply shock that is only getting worse. As the exchange reserves have already proven, on-chain data supports the theory.

The short-term supply, which has fallen to levels not seen since 2015, is another important signal. This indicator counts how many coins have been used in recent transactions. As a result, the statistic suggests that there has been some accumulation.

Supply shocks are typically bullish for cryptocurrency prices. Bitcoin's price is hovering at $48k at the time of writing, up 2% in the last week. The coin has gained 2.5 percent in the previous month.

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