Sharply Dropping Bitcoin Reserves May Suggest Return To Bullish Trend

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.

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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.

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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.

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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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BTC-Only Exchange Bitcoin Reserve Launches Across Europe

Bitcoin-only exchange Bitcoin Reserve has launched for users throughout Europe, offering retail and institutional stacking options.

According to a press release shared with Bitcoin Magazine, Bitcoin Reserve, an Estonia-based, bitcoin-only brokerage, has officially launched all of its services for clients throughout Europe.

With this launch, it appears that Bitcoin Reserve will become the first bitcoin-only exchange that is accessible to all European residents, according to a list on Bitcoin.org. Rather than present users with an abundance of other cryptocurrencies, Bitcoin Reserve will now allow all new European users to strictly focus on accumulating bitcoin.

The brokerage provides two core services for users. The first, known as Flash, enables users to immediately buy and sell bitcoin with limits of up to about $60,000 (€50,000). This service could be an avenue for users to purchase small amounts of bitcoin at regular intervals, effectively euro-cost averaging their investment and hedging against some of BTC’s volatility.

Paired with this, Bitcoin Reserve’s Concierge service offers the option to buy and sell bitcoin in amounts over that roughly $60,000 cap (€50,000).

“Bitcoin is the future reserve currency of the world, but the onramps into the ecosystem are decidedly cumbersome,” said Bitcoin Reserve Founder Nik Oraevskiy, in the release. “As more people turn away from an increasingly bankrupt economic system, Bitcoin Reserve will be there to help anyone to take charge of their financial future.”

Bitcoin Reserve’s launch across Europe is a significant development in the space as it gives retail investors there and option to be onboarded onto a bitcoin-only exchange with relatively high buying limits. Simultaneously, Bitcoin Reserve allows institutions in Europe to work with a bitcoin-focused company to acquire BTC. 

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