We can see them in action above, with bitcoin’s supply on exchanges falling by about 40,000 just recently or 1.5%.
This measure tends to correlate with bitcoin’s price because it indicates there are more buyers than sellers as more people are presumably sending their coins to safer storage like a paper wallet or gold plated wallets for the more fancy ones.
So leading to what some semi-jokingly call a sell side liquidity crisis that is visible on the two charts above.
This visibility can potentially level the playing field as everyone has access to this data, unlike in the banking system where only bureaucrats and bankers can see first what people are doing with their money.
However, you’d think this is a lagging indicator because someone already has bought and withdrawn for it to show above.
Nonetheless, we can see the trend and the direction and currently both are very clear for bitcoin.