Bitcoin Exchange Reserve Has Now Reached An Equilibrium After 2 Years Of Downtrend

On-chain data shows the percentage of Bitcoin supply on exchanges seems to have plateaued over the past few months, ending an overall downtrend that lasted about two years. Bitcoin Exchange Reserve Starts Moving Sideways As Inflow And Outflows Attain Equilibrium As per the latest weekly report from Glassnode, the percentage of the total BTC supply on exchanges looks to have ended its decline recently and is now moving sideways. The “exchange reserve” is an indicator that measures the total amount of Bitcoin stored in wallets of all exchanges. When the value of this metric rises, it means exchanges are observing net inflows right now. Such a trend can be bearish for the price of the coin as it represents an increase in the sell supply of the crypto. On the other hand, when the reserve’s value decreases, it implies outflows are overwhelming the inflows at the moment. This trend may turn out to be bullish for the value of Bitcoin as it may be a sign of accumulation from holders. Related Reading | Risk Aversion Pulls Crypto Market Down, Bitcoin Still Below $40K Now, here is a chart that shows how the percentage of the total supply that the exchange reserve accounts for has changed over the past couple of years: Looks like the value of the indicator seems to have moved sideways recently | Source: Glassnode's The Week Onchain - Week 10, 2022 As you can see in the above graph, the metric had an all-time high back in March 2020, following which the percentage of the Bitcoin supply on exchanges went on a constant decline until May 2021, where there was a brief increase due to the selloff that month. Soon after, the indicator did resume the downtrend, but following September 2021 the metric has mostly consolidated sideways. Related Reading | Goodbye, Russia – A Number Of Goldman Sachs Employees Are Leaving Russia To UAE This means that at the current value of the exchange reserve, an equilibrium between the inflows and the outflows has been established. The sideways trend is interesting since while the price of Bitcoin has struggled recently and macro uncertainties like the Russian-Ukraine war are looming over the market, there has been no significant increase in the indicator. Usually, a large selloff occurs during periods as now, but as the metric still continues to go sideways, it means there has still been enough demand (that is, outflows) to counteract any inflows. This trend may be bullish for the price of Bitcoin. BTC Price At the time of writing, Bitcoin’s price floats around $38.7k, down 13% in the past week. BTC's price seems to have shown lesser volatility since the plunge a few days back | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin Bearish Signal: Exchanges Observe Growing Reserves

On-chain data shows exchanges have been observing recent growth in their Bitcoin reserves, a sign that selling pressure may be increasing. All Exchanges Observe Growing Bitcoin Reserves, Except For Coinbase As an analyst in a CryptoQuant post pointed out, only Coinbase has seen some withdrawals recently. The relevant indicator here is the “exchange reserve,” which [...]

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Bitcoin ETFs Crucial To Sustain Current Buying Pressure Details

The price of Bitcoin recorded significant leaps in the past month rising by 14.74% according to data from CoinMarketCap. During this price rally, the premier cryptocurrency came close to establishing a new market all-time high, reaching a local peak of $73,149 on October 29. Interestingly, CryptoQuant CEO Ki Young Ju has stated a certain condition needed to sustain this price gain. Related Reading: Tracking Bitcoins Profit Cycles: Could A New Market High Be Near? Low Stablecoin Exchange Reserve Provides Need For Bitcoin ETFs In a series of X posts on November 1, Ki Young Ju stated that stablecoins currently provide an insufficient amount of liquidity to sustain the present buying pressure on Bitcoin. This observation is particularly important as traders commonly rely on stablecoins to acquire volatile assets such as Bitcoin, due to their fixed dollar value. Therefore, a higher stablecoin exchange reserve translates into significant potential for an impending price gain via wide-scale purchase. However, According to Young Ju, crypto exchanges currently hold only 21% of the total stablecoin market i.e. $34 billion of $166 billion, as most of these tokens are currently being used for storage or remittances. This development represents a slow rise in the stablecoin exchange reserve of $30 billion recorded in September 2021 during the last bull run, despite a 33% growth in total stablecoin shares in the same period. Currently, the Bitcoin-to-stablecoin reserve ratio is 6.05, similar to the value seen at the last ATH. Therefore, in order to maintain BTCs present upward trajectory, Ki Young Ju postulates that the Spot Bitcoin ETFs, alongside Coinbase USD reserves, have to provide much-needed market liquidity.  Notably, the Spot Bitcoin ETFs can be said to be behind Bitcoins current rally considering their impressive inflows record of over $5 billion in the past three weeks. Of this figure, BlackRock’s IBIT has led the market recording investments of $4.44 billion in this timeframe. Ki Young Ju states that it is important the Bitcoin ETFs maintain this momentum as a breakdown in pace will reduce buying pressure, especially from brokerage firms such as Coinbase Prime, which may result in Bitcoin falling back into consolidation. Related Reading: Bitcoin Faces Fifth Consecutive Rejection At $72,000, Is Another Correction Coming? Bitcoin Price Overview At the time of writing, Bitcoin was trading at $69,608 reflecting a 1.32% loss in the last 24 hours. However, the assets trading volume is up by 25.61% and is valued at $51.56 billion. For the premier cryptocurrency, a return to above $73,000 remains much on the card, especially with the potential of sustained ETF flows and the upcoming US elections. If pro-crypto Donald Trump secures a victory on the ballot, Bitcoin should definitely establish a new all-time high with expectations of reaching $90,000-$100,000 at the end of 2024. Featured image from Nairametrics, chart from Tradingview

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