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After enduring a two-month-long consolidation alongside lacklustre on-chain activity, Bitcoin recoiled upon tapping the $25,000 resistance level on August 15, once more affirming to bulls that there was still a lot of work to be done.

In the past ten days, the largest cryptocurrency by market capitalisation has been on a freefall, with fears around Wednesday’s FOMC minutes sending its price to sub $20,000. However, despite the recent descent, investors seem to be doubling down on their Bitcoin purchases, with some leading on-chain metrics suggesting that the price could be preparing to come off its darkest phase.

According to crypto onchain analysis firm Glassnode, exchanges continue to experience a macro decline in supply, with this trend remaining intact since the March 2020 capitulation event.

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“On balance, Exchanges have seen a net outflow of -100K BTC following the May 2022 LUNA capitulation, which accounts for 3.2% of the total outflows since the March 2020 ATH,” Glasssnode wrote in last week’s onchain newsletter. 

Notably, the decline in exchange supply continues to grow despite prices plunging, which “underscores a persistent structural demand” from retail and institutional investors for sovereign self-custodial assets.

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Accordingly, since May’s terra-induced sell-off, short-term holders (STHs) had increased their BTC holdings by 330,000BTC. Whereas STHs usually are prone to buying tops and selling bottoms, Glassnode likened the current cohort to bear market floor buyers in 2015, November 2018 and December 2020 bottoms. Their accumulation was in response to an extreme drawdown in price. It could suggest a “final flush” of sellers preparing the market for “months of gradual accumulation” before a sustained bull run unfolds.

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Macroeconomic fears also seem to be decelerating, with recent inflation reports suggesting the Federal Reserve “Fed” is open to slowing or pausing further rate moves, placing the market on a recovery trajectory.

“Bitcoin couldn’t hold crucial support but did also reject at $23.6K in the recent bounce due to a dovish FOMC,” tweeted Michaël van de Poppe, founder of cryptocurrency education and consultancy firm eight global,  “I’m still looking at the region of around $23K for buyers to step in or reclaim $23.7K.”

Technically, Bitcoin still looks terrible, with the price carving out a bearish wedge pattern on the daily chart laying the ground for another short-lived correction. “, a prominent technical analyst, tweeted late Wednesday, echoing the views of other crypto enthusiasts.

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