Sharply Dropping Bitcoin Reserves May Suggest Return To Bullish Trend
20 Décembre 2021 - 8:00PM
NEWSBTC
On-chain data shows Bitcoin exchange reserves have sharply dropped
recently, suggesting a possible return to bullish trend. Bitcoin
Exchange Reserves Historical Data May Tell Current Trend Is Bullish
As explained by an analyst in a CryptoQuant post, the Bitcoin
exchange reserves seem to have sharply fallen in the past couple of
weeks. The “all exchanges reserve” is a BTC indicator that shows
the total amount of coins currently stored in exchange wallets.
When the value of this indicator moves up, it means investors are
depositing their Bitcoin to exchanges. Holders usually transfer
coins to exchanges either for withdrawing to fiat or for purchasing
altcoins with them. As such, this trend can be bearish for the
price of the crypto. On the other hand, when the reserve moves
down, it implies holders are withdrawing their coins at the moment.
Such a trend, if sustained, can prove to be bullish for BTC as it
may mean that investors are currently in a state of accumulation.
Related Reading | Bitcoin Drops To $46k As $44.2 Million In
BTC Gets Dumped Within 1 Min Now, here is a chart that shows the
trend in the value of the Bitcoin exchange reserve over the past
six months: BTC exchange reserves seem to be moving down since a
while now | Source: CryptoQuant The Bitcoin exchange reserve has
been trending down since May, which would suggest that the market
is currently accumulating the crypto. As you can see in the above
graph, the analyst has highlighted the two types of trend the
different parts of the indicator’s curve have seemed to follow
during this period. Related Reading | Is MicroStrategy
Considering Lending Their Bitcoin To Generate Yield? WHY? It looks
like a gradual decline of the reserve has usually marked peak
formation in the price of the coin. While a sharp drop seems to
correlate with upwards trend. Clearly, the current trend looks to
be one of a sharp drop, and so the quant believes that the coming
weeks might be bullish for Bitcoin. BTC Price At the time of
writing, Bitcoin’s price floats around $46k, down 4% in the last
seven days. Over the past month, the coin has lost 21% in value.
The below chart shows the trend in the price of BTC over the last
five days. BTC's price has been moving on a downward trajectory in
the past few days | Source: BTCUSD on TradingView Bitcoin has been
in consolidation for a while now as the price of the coin stagnates
in the $45k to $50k range. Currently, it’s unclear when the coin
might break out of this sideways movement, but if the exchange
reserves are anything to go by, the long-term outlook might be
bullish for BTC. Featured image from Unsplash.com, charts from
TradingView.com, CryptoQuant.com
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