Bitcoin exchange reserves are continuously plummeting as analysts pinpoint the trend to a shortage of sellers.
Since the March crash, the reserves on exchanges rapidly fell from 2,950,000 BTC to 2,700,000 BTC. Within merely seven months, a 250,000 BTC fall in exchange reserves signifies a $2.85 billion decline.
Analysts mainly attribute the sustained drop in Bitcoin exchange reserves to an overall shortage of sellers in the market.
As retail sellers refrain from selling BTC at current prices, institutions are also acquiring more BTC. The simultaneous drop in selling pressure and an increase in buyer demand is an optimistic trend for Bitcoin.
He emphasized that BTC outflows from exchanges are growing as cash reserves from institutions are flowing into Bitcoin.
According to Glassnode, a large portion of the Bitcoin supply is stored in "Accumulation addresses." These addresses represent users who never moved BTC from their wallets, who are likely storing BTC for the long term.
Despite various events that could have applied selling pressure on BTC, including the BitMEX probe and OKEx withdrawal suspension, BTC remains above $11,400.
The BitMEX and OKEx controversy also led exchange reserves to decline sharply, possibly spooking traders.
Although BitMEX swiftly processed withdrawals and OKEx wallets show no outflows, the regulatory uncertainty was sufficient to cause exchange reserves to slip.
BTC has been relatively stable above the said range, which technically is a positive sign for renewed momentum.
Seller shortage? Bitcoin exchange reserves plunge as BitMEX bleeds BTC
Published on Oct 18, 2020
by Cointele | Published on Coinage
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