Plummeting Bitcoin Exchange Reserves Show Investors Are Not Ready To Sell

Bitcoin exchange reserves are a good way to gauge investor sentiment in the market. It can show when investors are ready to sell, meaning that they believe the asset has hit an overvalued point. Likewise, it can show when investors are holding on to their bags and expecting the price of the digital asset to rally. The latter has been the norm going on four months now.

Since August, bitcoin exchange reserves have been plummeting with no signs of stopping. This has shown investor sentiment to be in the positive regarding the future of the asset, hence they are less willing to let go of their holdings in the market. With November and the price of BTC surging, it has not really changed the course of action as exchange reserves head towards an all-time low.

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Bitcoin Exchange Reserves

A recent report from Glassnode has shown that supply on centralized exchanges has continued to plummet in the fourth quarter of 2021. Daily withdrawals are on the rise as investors pull out their holdings on exchanges for safekeeping in private and cold storage. The report showed that daily withdrawals had hit as high as 5K BTC, an accelerated figure from the previous week.

This points to the market being in the “smart money accumulation” phase. In this phase, investors are buying up as many assets as possible and then consolidating their holdings in wait for better prices. Instead of dumping all assets in wait for the bear market, BTC being sold by investors are only so they could take strategic profits.

Bitcoin price chart from

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BTC falls to $63k | Source: BTCUSD on

Demand is up despite the price of BTC hitting new all-time highs. Coins leaving exchanges at an alarming rate is leading to a supply squeeze that will most likely see the value of the digital asset go up.

One thing to keep in mind though is that the market is nearing the end of this phase. Once it passes, it is expected that the price of BTC will record some downside, although not enough to keep the market down for too long.

Diamond Hands Are Dominating

Declining bitcoin exchange reserves point to hold sentiments being the order of the day. BTC investors are putting off selling their assets in wait for better market conditions, going against previous trends in bear markets. Expectations that investors would sell-off holdings at new all-time highs have been moot as outflows from exchanges have continued even after BTC hit a new ATH of $69K.

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New bitcoin wallets balances are also climbing at a rapid pace. Glassnode noted that the volumes of BTC being sent to newly established wallets have climbed, with 516,914 recorded transactions involving these newly established wallets. A 72% increase in a three-month period.

Market sentiment remains deep in the greed territory, signaling buy pressures in the markets. This is expected to continue at least until December. By then, it is speculated by market analysts that the price of the digital asset would hit a high of $100,000.

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Despite New ATH, Bitcoin Exchange Reserves Continue To Decline

Despite the fact that Bitcoin has made a new ATH above $66,000, the exchange reserves have continued their trend of decline.

Bitcoin All Exchanges Reserve Continues To Go Down

As pointed out by a CryptoQuant post, the Bitcoin all exchanges reserve continues to show a downtrend despite the crypto making new all-time highs (ATHs).

The all exchanges reserve is a BTC indicator that tells us the total amount of coins deposited on centralized exchange wallets.

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When the value of the metric shows an increase, it means investors are sending more of their Bitcoin to exchanges. This could imply that there is a selling pressure in the market as holders usually move their crypto to exchanges for withdrawing to fiat, or for purchasing altcoins with them.

Decreases in the indicator, on the other hand, suggest the supply for BTC is shortening as investors are taking their coins off exchanges. Such a trend could mean there is a buying pressure in the market and may prove to be bullish for the price.

Here is a chart that shows the trend in the Bitcoin all exchanges reserve indicator over the past couple of weeks:

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Bitcoin Exchange Reserves

Bitcoin Exchange Reserves

Bitcoin reserves seem to be trending downward | Source: CryptoQuant

As you can see in the above graph, while the price of BTC has shot up recently as the crypto makes new ATHs, the indicator’s value has sharply fallen down.

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What this implies is that many investors still haven’t tried to realize their profits. They have rather withdrawn their BTC and took it to personal wallets for hodling.

Below is another chart, this time for the Long-Term Holder SOPR indicator, which shows the degree of realized profits by investors who have owned their coins for more than 155 days.

Bitcoin Long-Term Holder SOPR

Bitcoin Long-Term Holder SOPR

BTC SOPR has been minimal recently | Source: CryptoQuant

As you would expect based on the reserves, the long-term holder SOPR has low values right now, showing that long-term investors still haven’t moved to realize their profits.

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Even though BTC has already made new ATHs, it would seem holders are still expecting the price to appreciate further before they begin to harvest their gains.

BTC Price

At the time of writing, Bitcoin’s price floats around $65.7k, up 14% in the last seven days. Over the past month, the crypto has gained 51% in value.

Here is a chart showing the trend in the price of BTC over the last five days:

Bitcoin Price Chart

Bitcoin Price Chart

Bitcoin's price continues to make new ATHs as the price flies past the $65k mark | Source: BTCUSD on TradingView
Featured image from, charts from,


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Here’s What Bitcoin Exchange Inventory Levels Means For The Bull Rally

Bitcoin exchange inventory level is a good way to gauge market sentiment towards the cryptocurrency. Inflows to exchanges in the past have usually indicated strong sell sentiment. Stemming from investors wanting to cash out the profits that they have made. This is usually the case during bull markets when prices go up. But for the first time, bitcoin exchange inventory levels are declining even though the price of the digital asset is on the rise.

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Numbers show that bitcoin exchange levels are not rising according to the price. If anything, the inverse looks to be the case. The number of bitcoins leaving exchanges recently has risen sharply. Just in the past 30 days, over 100,000 bitcoins have flowed out of exchanges. Representing one of the sharpest exchange reserves decline in the market.

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chart showing decline of bitcoin exchange reserves

chart showing decline of bitcoin exchange reserves

BTC exchange reserves experience sharp downtrend | Source: Twitter

Investors Are Accumulating

The number represents a decreased supply in the market, and the outflows indicate that demand for the digital asset is on the rise. Investors are holding on to their coins instead of moving the coins to exchanges to sell. This has now put a lot of buy pressure on the market. The decreased supply will inadvertently lead to an increase in the price of the digital asset.

Chart showing exchange reserves following the price of bitcoin

Chart showing exchange reserves following the price of bitcoin

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BTC exchange reserves fall for the first time in a bull market | Source: Twitter

These patterns show a peculiar accumulation pattern in the market. Bitcoin accumulation is usually highest when the market is in a bear market. An extended bear market like the one following the 2017-2018 bull market would see investors hoarding coins in wait for the next bull. But presently, accumulation patterns show that investors are hoarding coins even in a bull market.

Sentiment remains generally positive with the Fear & Greed Index finally moving into greed for the first time in months. Accumulation patterns now show a very bullish pattern in the market. Retail investors do not think that the bull market will be over anytime soon, neither do the institutional investors.

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As more bitcoins are mined, leading to the decline in the number of bitcoins left to come into the market, investors are trying to get their hands on as much of the digital asset as possible. This increased demand is what has sent the price surging. Leading to a continuation of the bull market that had grinder to a half after the asset hit a new all-time high of $64K.

Bitcoin Moving Up With Accumulation

Bitcoin’s price has been on the up and up going into August. Its price had hit $45K for the first time in two months, pointing to a continuation of the bull market. Eight consecutive green days had seen BTC hit eight green candles, triggering a bull run in the market. At this point, bulls had taken complete control of the market. Bears had recorded massive losses as the market saw over $1 billion shorts liquidated in the span of 24 hours.

Bitcoin price chart from

Bitcoin price chart from

BTC price trailing $44K | Source: BTCUSD on

The bulls have continued to maintain their hold on the market. Bitcoin price has experienced several dips in this week alone. But downwards movement on the charts has not been to a significant extend. The price had tested $48K this week. Eventually breaking back down below $44K when faced with resistance at this level.

Trailing prices now rest in the $44K territory for BTC. Price analysis shows the mark to beat for another rally sits at $46K with the current momentum. As of the time of this writing, BTC is currently trading at $44,470, with an overall market cap of $835 billion.

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