On-chain data shows Bitcoin exchange reserves have now reached new 4-year lows, a sign that could prove to be bullish for the crypto\u2019s price.<\/p>\n
Bitcoin Exchange Reserve Has Sunk Down Further Recently<\/p>\n
As pointed out by an analyst in a CryptoQuant post, the BTC exchange reserve has been going down, suggesting buying has been going in the market.<\/p>\n
The \u201call exchanges reserve\u201d is an indicator that measures the total amount of Bitcoin currently stored in wallets of all centralized exchanges.<\/p>\n
When the value of this metric goes up, it means investors are depositing a net amount of coins to exchanges right now.<\/p>\n
Such a trend, when prolonged, can be bearish for the price of the crypto as holders usually transfer their crypto to exchanges for selling purposes.<\/p>\n
Related Reading |\u00a0When Greed? Bitcoin Market Crushed Under One Full Month Of Fear<\/p>\n
On the other hand, a downtrend in the reserve suggests investors are withdrawing their BTC from exchanges at the moment. This kind of trend can be bullish for the price of the crypto.<\/p>\n
Now, here is a chart that shows the trend in the Bitcoin exchange reserve over the last few years:<\/p>\n\n
The value of the metric seems to have experienced downwards movement over the last year | Source: CryptoQuant<\/p>\n
As you can see in the above graph, the Bitcoin exchange reserve has observed some sharp movement down recently, taking its value to new 4-year lows.<\/p>\n
This is a continuation of the overall downtrend in the indicator that has been going on for almost a full 12 months now.<\/p>\n
Related Reading |\u00a0U.S. Macro Pressure Responsible For Entire Bitcoin Downtrend<\/p>\n
This may imply that the market has been in a state of constant accumulation, which would mean a supply shock could be deepening in the BTC market.<\/p>\n
Due to supply-demand dynamics, such a shock can be constructive for the price of the cryptocurrency in the long term.<\/p>\n
However, some data from December 2021 suggests that the growth of new investment instruments like ETFs are likely one of the reasons behind the exchange reserve\u2019s decline.<\/p>\n
The coins are simply moving from one source of selling pressure into another. Such a shift would mean that a supply shock wouldn\u2019t take place just by declining exchange reserves.<\/p>\n
Nonetheless, some of the decline should still be from buying in the market so a decreasing reserve can still be bullish for the value of Bitcoin.<\/p>\n
BTC Price<\/p>\n
At the time of writing, Bitcoin\u2019s price floats around $30.1k, up 1% in the past week. Over the last month, the crypto has lost 12% in value.<\/p>\n\n
Looks like the value of the crypto has moved sideways over the past couple of days | Source: BTCUSD on TradingView
\nFeatured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/p>","protected":false},"excerpt":{"rendered":"
<\/p>\n
On-chain data shows Bitcoin exchange reserves have now reached new 4-year lows, a sign that could prove to be bullish for the crypto\u2019s price.<\/p>\n
Bitcoin Exchange Reserve Has Sunk Down Further Recently<\/p>\n
As pointed out by an analyst in a CryptoQuant post, the BTC exchange reserve has been going down, suggesting buying has been going in the market.<\/p>\n
The \u201call exchanges reserve\u201d is an indicator that measures the total amount of Bitcoin currently stored in wallets of all centralized exchanges.<\/p>\n
When the value of this metric goes up, it means investors are depositing a net amount of coins to exchanges right now.<\/p>\n
Such a trend, when prolonged, can be bearish for the price of the crypto as holders usually transfer their crypto to exchanges for selling purposes.<\/p>\n
Related Reading |\u00a0When Greed? Bitcoin Market Crushed Under One Full Month Of Fear<\/p>\n
On the other hand, a downtrend in the reserve suggests investors are withdrawing their BTC from exchanges at the moment. This kind of trend can be bullish for the price of the crypto.<\/p>\n
Now, here is a chart that shows the trend in the Bitcoin exchange reserve over the last few years:<\/p>\n
The value of the metric seems to have experienced downwards movement over the last year | Source: CryptoQuant<\/p>\n
As you can see in the above graph, the Bitcoin exchange reserve has observed some sharp movement down recently, taking its value to new 4-year lows.<\/p>\n
This is a continuation of the overall downtrend in the indicator that has been going on for almost a full 12 months now.<\/p>\n
Related Reading |\u00a0U.S. Macro Pressure Responsible For Entire Bitcoin Downtrend<\/p>\n
This may imply that the market has been in a state of constant accumulation, which would mean a supply shock could be deepening in the BTC market.<\/p>\n
Due to supply-demand dynamics, such a shock can be constructive for the price of the cryptocurrency in the long term.<\/p>\n
However, some data from December 2021 suggests that the growth of new investment instruments like ETFs are likely one of the reasons behind the exchange reserve\u2019s decline.<\/p>\n
The coins are simply moving from one source of selling pressure into another. Such a shift would mean that a supply shock wouldn\u2019t take place just by declining exchange reserves.<\/p>\n
Nonetheless, some of the decline should still be from buying in the market so a decreasing reserve can still be bullish for the value of Bitcoin.<\/p>\n
BTC Price<\/p>\n
At the time of writing, Bitcoin\u2019s price floats around $30.1k, up 1% in the past week. Over the last month, the crypto has lost 12% in value.<\/p>\n
Looks like the value of the crypto has moved sideways over the past couple of days | Source: BTCUSD on TradingView
\nFeatured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/p>\n
<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-884","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/884","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=884"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/884\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=884"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=884"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=884"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}