Bitcoin Exchange Reserves Plummets to Lowest in Years as BTC Drops to $95K

by

As a seasoned analyst with over two decades of experience in the financial market, I have seen my fair share of bull and bear markets. The current state of Bitcoin, with its reserves at their lowest levels in years and a lack of buying pressure to push it above the $100,000 mark, is reminiscent of the early stages of the dot-com bubble. However, unlike that bubble, this one seems to have a solid foundation – the backing of a pro-crypto president.

The reserves of Bitcoin on digital trading platforms have fallen to record lows over the past few years, as indicated by data from blockchain analysis platform CryptoQuant. Simultaneously, Bitcoin has struggled to maintain its value above the $97,000 mark, which hints at a diminished buying interest that could prevent a steady surge towards the projected $100,000 price point.

171,000 Bitcoins worth approximately $95,583 each were moved from digital asset trading platforms following Donald Trump’s victory in the 2024 U.S. presidential election. Trump, who is known to be pro-crypto, has expressed supportive views towards cryptocurrencies during his campaign speeches, leading to increased optimism within the sector. In addition, the data indicates a daily volatility of 0.4%, a market cap of $1.89 trillion, a 24h volume of $71.59 billion, and a 24h volatility of $95,583.

It’s worth mentioning that the amount of Bitcoin held by exchanges has been decreasing since the start of this year, reaching approximately 3 million BTC in early 2024. However, as we approach the end of the year, the situation has dramatically reversed, with only about 2.64 million BTC currently being traded on digital asset platforms now.

A decrease in Bitcoin reserves held on exchanges may signal a bullish trend, as it seems that some Bitcoin owners might be transferring their coins to personal wallets, anticipating potential profits under the Trump administration. This action could potentially reduce the selling pressure for Bitcoin, currently valued at $95,744.51 according to CoinMarketCap data, as these holders appear less likely to sell their assets in the short term.

The psychological hurdle of $100,000 presents a significant challenge for Bitcoin, and overcoming this barrier requires a substantial increase in purchasing activity. Recently, the Bitcoin trading volume dropped by 15.5% to reach $59.74 billion, suggesting that investors are shifting their funds towards other cryptocurrencies as altcoins have shown bullish trends within the past 24 hours.

Increasing Accumulation of BTC

The amount of Bitcoin is steadily increasing, as shown by the chart from TradingView below. As the A/D line keeps reaching new highs, investors might witness a brief period of distribution before Bitcoin surges past the $97,000 mark in the near future.

Source: TradingView

Furthermore, the Relative Strength Index stands at 62.05, indicating that Bitcoin’s price direction is primarily influenced by bulls. Also, notice that the RSI line has retreated from overbought zones, hinting that the ongoing correction may soon come to an end, and a period of sideways movement could potentially precede Bitcoin reaching its record high of $99,655.50 again.

Previously mentioned, a rise in Bitcoin is anticipated as large-scale investors like MicroStrategy and MARA take substantial steps to invest in the forefront digital currency, with speculation that profit-taking will eventually subside.

Read More

2024-12-04 21:03