Analyst Nicholas Merten says Bitcoin’s withdrawal from the exchanges may seem bullish, but it’s not just that.

In Video Merten recently looked at numbers from the blockchain tracker Glassnode, which show a dwindling supply of Bitcoin on the stock exchanges.

Source: Nicholas Merten

On the surface, the decreasing supply of Bitcoin on the exchanges looks optimistic for the price.

However, the analyst notes that this metric does not include futures and options markets. According to him, more and more cryptocurrencies are actually operating in the derivatives market. There it is traded without any pressure on the underlying asset.

“Throughout the 2020-2021 period, the decline was constant and small, falling a few percentage points as a real bullish sign. Other players buy large amounts of Bitcoin and store them in cold stores, take them off the exchanges and hold them for a long time. Serious institutional players: hedge funds, family funds … just want to swallow BTC …

I’m not saying it won’t happen, but it’s not the main reason behind the decline this time. “

Merten believes that derivatives will suck up capital from real crypto markets, “confuse” space and reduce buying pressure for BTC and other digital assets. According to the strategist, traders who switch their preferences from the spot market to the derivatives market could be partly due to the underperformance of the crypto market.

“That’s what really disorientates the market. Because the influx from the exchanges, which everyone says is bullish, is actually bringing Bitcoin into the derivatives markets. All new users who own bitcoin, or in this case dollars or some form of value, are switching to derivatives platforms. Your buying pressure no longer affects the stock exchanges. “

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