The Bitcoin exchange reserve has fallen off a cliff, as an on-chain analysis shows. This behavior is usually a bullish indicator for the BTC market.
The bitcoin reserve on all exchanges has decreased
As can be seen from a CryptoQuant post, the reserve indicator for all BTC exchanges has risen downhill in the past few days.
The Bitcoin Reserve for All Exchanges is an indicator that shows the amount of BTC that is stored in the wallets of all exchanges. If the value of the metric increases, it means that more investors are sending their crypto to exchanges.
More BTC on the exchanges implies selling pressure. On the other hand, if the value goes down, it means investors are sending their coins from exchange wallets to personal wallets.
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Here is a graph showing the trend in the value of the BTC reserve of all exchanges over the past two months:
The BTC all exchanges reserve seems to have steeply declined | Source: CryptoQuant
As the graph above shows, the metric has fallen quite steeply. In the past two days, the indicator has lost more than 100,000 Bitcoin in value!
As the value of the indicator goes down, it means that more BTC is pulling away from the exchanges, which could mean there is buying pressure in the market. This should have a positive effect on the price.
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A look at the flow charts of popular exchanges shows massive moves. At Coinbase Pro, 30,000 BTC left the platform on Wednesday, while Binance, the largest exchange by trading volume, pulled around 29,000 BTC from their wallets.
A few days ago, Binance was watching huge net flows. The price then developed positively, so it is possible that the decline in the reserves of all exchanges will cause the price to rise this time as well.
At the time of writing, Bitcoin’s price is hovering around $ 39.8k, up 24% over the past 7 days. In the past month, crypto has appreciated almost 15% in value.
Here is a chart that shows the trend in BTC price over the past 3 months:
BTC catches a sharp upwards trend | Source: BTCUSD on TradingView
After struggling in a sector-bound market for quite a while, Bitcoin has finally regained some of the volatility. The spike in price from $ 34,5,000 to $ 39,5,000 was accompanied by the largest short squeeze in the history of the coin as short sellers rushed to reduce their losses.
The crypto is now testing the $ 40,000 resistance level, and if it can continue the rally and prevail, the coin is likely to hit the $ 45,000 mark. However, if the level cannot be exceeded, BTC could revert to an area-bound market.