Bitcoin Bearish Signal: Exchange Reserves Show Sharp Increase
December 02 2021 - 2:00PM
NEWSBTC
Bitcoin exchange reserves have shown a sudden sharp spike recently,
despite being in a declining trend for months. After Months Of
Downtrend, Bitcoin Exchange Reserves Shoot Up As pointed out by a
CryptoQuant post, on-chain data shows that BTC exchange reserves
have spiked up in the past couple of weeks. The “all exchanges
reserve” is an indicator that measures the total amount of Bitcoin
stored in wallets of all exchanges at a particular point in time.
If the value of the metric goes down, it means investors are taking
their coins off exchanges. Holders may be withdrawing their BTC to
accumulate them as they might believe that the price would
appreciate further. As a result, this trend could be bullish for
the crypto. On the other hand, if the indicator increases in value,
it implies holders are transferring their Bitcoin to exchanges,
possibly for withdrawing to fiat or for purchasing altcoins. Such a
trend can prove to be bearish for the coin. Related Reading
| Bitcoin Open Interest Remains Elevated Post Dramatic Dip
Now, here is a chart that shows the trend in the BTC exchange
reserves over the past few months: The indicator seems to have
spiked up recently | Source: CryptoQuant As you can see in the
above graph, the Bitcoin exchange reserves have been falling down
for a while now. However, in the past couple of days, the
indicator’s value has shown a sudden increase. This rise in the
reserve amounts to around 39k BTC being deposited to exchanges
between yesterday and today alone. Related Reading | The
Bitcoin Saga: A Look At BTC’s History Of Up’s And Down’s Such sharp
trend is usually an indication of whale activity. The price of
Bitcoin has struggled recently so it’s possible some institutional
investors could be preparing to pull out from the market. If it’s
indeed a sign of whale dumping, then the outlook of the crypto’s
price could be bearish at least in the near future. BTC Price At
the time of writing, Bitcoin’s price floats around $56.4k, down 2%
in the last seven days. Over the past month, the crypto has lost 8%
in value. The below chart shows the trend in the price of the coin
over the last five days. BTC's price has mostly consolidated in the
past few days | Source: BTCUSD on TradingView Over a week ago,
Bitcoin had a crash triggered by fud from the Omicron COVID
variant. The coin’s price dropped to as low as $53k, but a few days
ago the coin recovered its losses. However, since then, the crypto
has mostly trended sideways. It’s unclear at the moment which
direction the coin might break out of this consolidation, but if
the exchange reserve is anything to go by, BTC might face bearish
trend soon. Featured image from Unsplash.com, charts from
TradingView.com, CryptoQuant.com
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