October 22, 2021

Bitcoin Spot Exchange Reserves Records a Two-Week Decline

Despite the price of BTC going up by 5.9% on today’s market after a mini-slump due to China’s Crypto ban, Bitcoin Spot Exchange Reserves remain low. In two weeks, the reserves lost nearly 12.5k BTC, resulting in a 25 percent decline. This implies that the dip is being bought. 

The Decline In Reserve Explained 

Earlier this September, BTC witnessed a major pullback due to over-leveraging by sellers. The flagship crypto lost about $10k, moving from $52k to $42k. The announcement from El Salvador’s President about adopting BTC as its legal tender may have contributed to the reserves plummeting, but experts are not without doubt that the over-leveraging factor is the significant cause of the loss in BTC reserves. 

Daniel Joe, a crypto analyst, explains that a drop in reserves only means that the dip is being purchased. Thus, investors see the opportunity as a perfect time to buy. Meanwhile, the crash in BTC made liquidation surge by 65%. 

Glassnode, a popular on-chain metrics platform, revealed that the BTC liquidation dominance rose significantly in the sell-off by more than 65%. According to Glassnode, this sell-off is higher than the one recorded in August, implying that leveraged traders tried to make up for their losses on equity possession by buying the dip. Glassnode also reports that hoarded BTC reached an eight-month high of 7.1M. 

The data correlates with the recent BTC accumulation uptrend, in which long-term holders refused to sell their coins. In addition, the current average spending output has declined over the last few weeks, further suggesting that the holders have a significant portion of BTC in their possession. 

Glassnode recently confirmed that a massive amount of supply was still in cold storage. It means that a holding culture is maintained, which is good for the price of BTC. When coins are held for a long time, it forces their price to go up. The attempt to initiate a bullish run is what BTC holders are currently doing. 

BTC Transaction Volume Rises 

Meanwhile, transactions involving the flagship crypto has risen, and this could push BTC price up soon. It’s a well-known fact that institutional investments play an essential role in BTC’s road to high prices. The last time these institutions made a move similar to this was in April. Then BTC hit an all-time high of $64k. 

With more institutional investments, BTC may witness a surprising bullish run that could set a new record high price. Bitcoin is expected to go up further after recording a 5.9% rise.