Bitcoin balance on exchanges rise to YTD high amid network issues

Bitcoin (BTC) supply on exchanges has risen to a year-to-date (YTD) high of over 2.3 million, according to Glassnode data analyzed by CryptoSlate.

According to the chart below, BTC balance on exchanges rapidly declined towards the end of 2022 after FTX’s collapse. At the time, CryptoSlate reported that Bitcoin balance on several significant exchanges — including Binance, declined as crypto investors self-custody their assets.

However, with the crypto market turning a corner in the first quarter of the year — BTC rose more than 67% on the YTD metric — traders have begun depositing their assets on exchanges again to profit from the price gain.

The Glassnode chart shows that BTC kept on significant exchanges witnessed an uptick since mid-March, and currently stands at just over 2.3 million BTC. This coincided with when the flagship digital asset traded above $27,000 for the first time in 2023.

Since then, crypto traders have consistently deposited their assets on exchanges, increasing BTC’s selling pressure.

Coinglass data showed that around half of this BTC balance sits on Binance and Coinbase. Other exchanges with substantial BTC holdings include Gemini, Bitfinex, OKX, Kraken, and others.

Meanwhile, BTC balance on exchanges is on a multi-year long-term decline — behind the over 3 million recorded in January 2020.

BTC maintains $27k

Bitcoin has continued trading above $27,000 after the recent network issues that have plagued it. The flagship digital asset peaked at $28,066 and liquidated roughly $32 million in positions held on it.

On May 8, Binance was forced to suspend BTC withdrawals twice due to network congestion. The exchange cited the recent surge in gas fees as why it had to make the decision.

Glassnode noted an extremely high demand for blockspace driven by BRC-20 tokens — utilizing text-based inscriptions and ordinals.

Despite the increased network activity, CryptoSlate Insight reported that active addresses on the network have fallen to October 2021 lows — while new addresses have fallen to the lowest recorded number on the YTD metric.

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