Bitcoin Bullish Signal: Exchange Reserve Loses Another 50k BTC Over Past Week
17 Marzo 2022 - 01:00PM
NEWSBTC
On-chain data shows the Bitcoin exchange reserve has lost another
50k BTC over the past week, a sign that could be bullish for the
price of the crypto. Bitcoin Exchange Reserve Continues To Observe
Further Decline In Recent Weeks As pointed out by an analyst in a
CryptoQuant post, 50k BTC in net outflows has exited exchange
wallets over the past week. The “all exchanges reserve” is an
indicator that measures the total amount of Bitcoin stored in
wallets of all centralized exchanges. When the value of this metric
goes up, it means the supply on exchanges is rising as investors
deposit a net amount of coins. Such a trend may be bearish for the
price of the coin as holders usually transfer to exchanges for
selling purposes. On the other hand, the reserve’s value decreasing
implies that a net amount of Bitcoin is exiting exchange wallets at
the moment. This kind of trend when sustained over a period can
prove to be bullish for the coin’s price as it may be a sign that
investors are accumulating. Related Reading | Current Stretch
Of Bitcoin Fear Surpasses 2021 Selloff Now, here is a chart that
shows the trend in the BTC exchange reserve over the past few
months: Looks like the value of the indicator has sharply gone down
recently | Source: CryptoQuant As you can see in the above graph,
the Bitcoin exchange reserve has been going down over the last few
months. In the past week alone, the metric has dropped 50k BTC in
value. The last couple of days especially saw large downward spikes
amounting to around 10k to 11k BTC. Related Reading | Mike
Novogratz: Bitcoin Price To Range Between $30k-$50k Throughout The
Year The exchange reserve has traditionally been considered the
“selling supply” of the coin. As it has been shrinking for a while
now, the effect on the price should be positive due to
supply-demand dynamics. Some have referred to this decline as
creating a “supply shock” in the market. However, recent data
suggests that the reserve is no longer the main source of selling
pressure, coins exiting from exchanges have instead just shifted
into investment vehicles like ETFs. Nonetheless, the reserve
declining does reduce part of the selling supply so the net effect
of such a trend may still be bullish. BTC Price At the time of
writing, Bitcoin’s price floats around $41k, up 5% in the past
week. Over the last month, the crypto has lost 6% in value. The
below chart shows the trend in the price of the coin over the past
five days. The price of Bitcoin seems to have seen a surge over the
last couple of days | Source: BTCUSD on TradingView Featured image
from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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