In fact, Sharply Dropping Bitcoin Reserves May Suggest Return To Bullish Trend
Interestingly, On-chain facts shows Bitcoin exchange reserves have sharply dropped recently, suggesting a possible return to bullish trend.
As you may know, Bitcoin Reserves Historical InformationExchangeMay Tell Current Trend Is Bullish
In fact, As explained by an analyst in a CryptoQuant submit, 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.
Holderscoinsusually transfer to exchanges either for withdrawing to fiat or for purchasing altcoins with them. As such, this trend can be bearish for the price of crypto the. As you may know, When the value of this indicator moves up, it means investors are depositing their Bitcoin to exchanges.
On the other hand, when the reserve down, it implies holdersmovesare 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.
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Right away, here is a chart thatexchangeshows the trend in the value of the Bitcoin 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 field suggest that the would is currently accumulating the crypto.
Actually 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 as a matter of fact have seemed to follow during this, period.
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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
Interestingly, , the time of writingAtBitcoin’s price floats around $46k, down4% in the last seven days. Over the past month, the coin has lost 21% in value.
Indeed, Thefivebelow chart shows the trend in the price of BTC over the last days.
BTC's price has been moving on a downward trajectory in the past few days | Source: BTCUSD on TradingView
as a matter of fact Bitcoin has been in consolidation for a while asap 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-agreement outlook might be bullish for BTC.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
