CryptoQuant data shows that Bitcoin (BTC), reserves at cryptocurrency exchanges, have fallen to an all-time low. This drop coincides the the bullish market which is pushing the digital assets price to close the $100,000 barrier. This decline in price could have major consequences for the supply and demand dynamics of this asset.
Bitcoin: Investor confidence increasing?
As long-term (LTH), and short term (STH) holders transfer their Bitcoins into trading platforms, the reserves of exchanges will increase. This trend is being broken by the current bull run, which has seen BTC exchange reserve dwindle.
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Data Cryptoquant reports that since Donald Trump, a crypto-friendly Republican candidate who won the US Presidential election in November, over 171,000 BTC has been removed from cryptocurrency exchanges. BTC withdrawals from crypto exchanges are high, indicating that BTC holders may be moving to cold storage.
According to the chart below, BTC exchange reserves witnessed a sharp decline starting in November 2022 – falling from 3.33 million BTC on November 5, to 2.93 million BTC on December 21.
A significant drop in the price of gasoline began in February 2020, possibly in anticipation. Bitcoin halving In April, the supply shortage of the digitally-programmed item was revealed. During this period, reserves decreased from 3.05 million BTC to 2.63 million BTC by October 30 – a decline of 13.77% over eight months.
This is the lowest exchange reserve level for years. This continuous decline could indicate a possible supply shortage for Bitcoin that would drive up its price in the next few months.
BTC Illiquid Supply Continues To Grow
One more data point to support the hypothesis of long-term BTC holding is Glassnode’s illiquid supply metric. This chart shows the amount of illiquid digital assets has increased by 185,000 BTC during the past 30 day period.
The illiquid stock now represents approximately 14,8 million BTC. This is nearly 34 of the 19.8 million BTC currently in circulation. Bitcoin could see a price surge if this pattern continues. This is due to the scarcity of supply. But this may also lead to increased volatility.
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Bitcoin’s price could be affected by a short-term correction, even though the long-term indicators of a bullish trend are a decline in reserves and an increase in illiquidity. According Crypto analyst Ali Martinez says that BTC’s hourly chart has formed an hourly head-and shoulder pattern, which might trigger a sell-off The asset can be sold for up to $90,00,000.
Rekt capital, another experienced crypto analyst. said BTC’s rally has entered a parabolic phase after it briefly touched the price of $98,000. BTC is currently trading at $94,968 as of press time. This represents a 1.4% decline in the last 24 hours.
Charts from Tradingview.com, Glassnode and Tradingview.com, CryptoQuant.
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Source: www.newsbtc.com
