Bitcoin Exchange Reserve Spikes Up, Selloff Not Over Yet?

Keshav Verma

Last Updated: June 11, 2024 7:56 am

3 mins read

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On-chain data shows Bitcoin exchange reserves have sharply increased in value, a sign that the selloff may not be over yet.

Bitcoin Exchange Reserve Observes Rapid Rise

As pointed out by an analyst in a CryptoQuant post, a high number of coins have entered exchanges over the last day.

The “exchange reserve” is an indicator that measures the total amount of Bitcoin currently present in wallets of all centralized exchanges.

When the value of this metric goes up, it means the supply on exchanges is going up as investors are depositing a net number of coins.

As holders usually transfer to exchanges for selling purposes, such a trend could be bearish for the price of the crypto.

On the other hand, a declining value of the reserve suggests investors are withdrawing their coins at the moment. This kind of trend, when prolonged, can be a sign that holders are accumulating, which could prove to be bullish for the coin’s price.

Now, here is a chart that shows the trend in the Bitcoin exchange reserve over the past few months:

Looks like the value of the metric has jumped up recently | Source: CryptoQuant

As you can see in the above graph, the Bitcoin exchange reserve has observed a sharp increase in its value recently.

The chart also shows the curve for the “all exchanges netflow,” another metric which measures the net amount of coins entering or exiting exchanges.

Basically, this metric tells us about how much the reserve is increasing or decreasing right now. As expected, its value also shot up over the last few days.

The fact that the Bitcoin exchange reserve doesn’t seem to have changed trend and is still rapidly rising after the crash may mean that the crypto’s price could see further decrease in its value in the near future.

BTC Price

At the time of writing, Bitcoin’s price floats around $21.1k, down 30% in the last seven days. Over the past month, the crypto has lost 32% in value.

The below chart shows the trend in the price of the coin over the last five days.

The price of BTC seems to have ben moving sideways since the crash | Source: BTCUSD on TradingView

Following the crash, Bitcoin touched as low as $20k, before rebounding back a little to the current levels. Currently, it’s unclear whether the carnage has ended, or if further decline is coming.

But if the exchange reserve is anything to go by, then signs aren’t looking in the crypto’s favor.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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