Negative Bitcoin Absorption Rates Hint at a Price Surge, Analysts Say

Analysts observe negative Bitcoin absorption rates, signaling a potential price rally. The absorption rate evaluates the balance between mining rates and changes in BTC on exchanges. Currently, both the monthly and yearly absorption rates are negative, according to beincrypto. 

Bitcoin hasn’t surpassed $32,000 this year, often dropping below $30,000. Still, the negative absorption could be a beacon of hope for investors. The absorption rate helps gauge Bitcoin demand over different periods. It shows whether the new Bitcoin supply is outweighed by the inflows to exchanges.

Negative absorption rates have been recorded monthly since May, with the yearly rate at around -100%. This data means that over the past year, investors have amassed twice as much BTC as miners have produced.

YouTube influencer James Mullarney believes that this absorption pattern suggests “much higher prices in the future.” He notes that a similar pattern of sustained negative absorption rates accompanied and outlasted the 2020-2021 bull run. Therefore, he sees a positive correlation between negative absorption and future price growth.

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