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Breaking News: Cantor Fitzgerald Projects Major Growth For Hyperliquid (HYPE) In Explosive New Report
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Breaking News: Cantor Fitzgerald Projects Major Growth For Hyperliquid (HYPE) In Explosive New Report

Sharply Dropping Bitcoin Reserves May Suggest Return To Bullish Trend

Keshav Verma
Keshav Verma
Last Updated: June 11, 2024 7:13 am
3 mins read
Bitcoin

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On-chain data shows Bitcoin exchange reserves have sharply dropped recently, suggesting a possible return to bullish trend.

Bitcoin Exchange Reserves Historical Data May Tell Current Trend Is Bullish

As explained by an analyst in a CryptoQuant post, the Bitcoin exchange reserves seem to have sharply fallen in the past couple of weeks.

The “all exchanges reserve” is a BTC indicator that shows the total amount of coins currently stored in exchange wallets.

When the value of this indicator moves up, it means investors are depositing their Bitcoin to exchanges. Holders usually transfer coins to exchanges either for withdrawing to fiat or for purchasing altcoins with them. As such, this trend can be bearish for the price of the crypto.

On the other hand, when the reserve moves down, it implies holders are withdrawing their coins at the moment. Such a trend, if sustained, can prove to be bullish for BTC as it may mean that investors are currently in a state of accumulation.

Related Reading | Bitcoin Drops To $46k As $44.2 Million In BTC Gets Dumped Within 1 Min

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

Bitcoin Exchange Reserves

BTC exchange reserves seem to be moving down since a while now | Source: CryptoQuant

The Bitcoin exchange reserve has been trending down since May, which would suggest that the market is currently accumulating the crypto.

As you can see in the above graph, the analyst has highlighted the two types of trend the different parts of the indicator’s curve have seemed to follow during this period.

Related Reading | Is MicroStrategy Considering Lending Their Bitcoin To Generate Yield? WHY?

It looks like a gradual decline of the reserve has usually marked peak formation in the price of the coin. While a sharp drop seems to correlate with upwards trend.

Clearly, the current trend looks to be one of a sharp drop, and so the quant believes that the coming weeks might be bullish for Bitcoin.

BTC Price

At the time of writing, Bitcoin’s price floats around $46k, down 4% in the last seven days. Over the past month, the coin has lost 21% in value.

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

Bitcoin Price Chart

BTC's price has been moving on a downward trajectory in the past few days | Source: BTCUSD on TradingView

Bitcoin has been in consolidation for a while now as the price of the coin stagnates in the $45k to $50k range. Currently, it’s unclear when the coin might break out of this sideways movement, but if the exchange reserves are anything to go by, the long-term outlook might be bullish for BTC.

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

Keshav Verma

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

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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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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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