According to Coinglass data, the Bitcoin reserves of centralized exchanges have reached a historical low, does this imply that Bitcoin will further rise? This article will analyze the historical trend changes.
Summary:
Arthur Hayes: Bitcoin’s skyrocketing opportunity hidden in the Middle East war.
Background:
Trump’s victory indicator: Polymarket leads He Jinli by 20%, showing a positive correlation with Bitcoin’s trend.
With the dual driving force of the Federal Reserve’s interest rate cut and relaxed monetary policy, as well as the traditionally excellent performance of the risk market in October, Bitcoin broke through the 68,000 level earlier this week, reaching a high of $68,422, setting a new price high since July 30. The performance is exciting.
CEX Bitcoin reserves hit a historic low.
The current concern for investors is whether Bitcoin’s upward trend will continue, especially since it has risen over 15% in the past week. In response to this, Cointelegraph posted a picture on the social platform X yesterday, pointing out that the current Bitcoin reserves on centralized exchanges are about 2.43 million coins, once again hitting a historical low. As the Bitcoin reserves on exchanges continue to decline, it may indicate that investors are more inclined to transfer Bitcoin to cold wallets, thereby limiting market supply and possibly foreshadowing an increase in Bitcoin prices.
However, as time goes on, let’s verify whether “Bitcoin reserves on exchanges” can really serve as an indicator of Bitcoin’s trend.
According to Coinglass data, after Bitcoin’s price reached a historical high of $73,000 in March this year, Bitcoin reserves have been decreasing, but the BTC price has not reached a new high, but has continued to fluctuate. Therefore, in the short term, this indicator does not seem to be completely consistent with Bitcoin’s trend. The author believes that when Bitcoin’s liquidity was not as good in the past, this indicator may have had enough reference value. However, with the development of the market, the birth of Bitcoin OTC market, futures, spot ETFs, the reference value of this indicator may be weakening, or at least the correlation has declined. Therefore, investors are urged to evaluate from multiple perspectives.
Bitcoin exchange reserves and price trend chart. Source: Coinglass
Analyst: Bitcoin is expected to break through $70,000 in the next few weeks.
Regarding the future of Bitcoin, Jonathan de Wet, the Chief Investment Officer of Zerocap, expressed optimism in a research report on Wednesday (16) this week. He believes that Bitcoin’s upward trend is still strong and is expected to break through the $70,000 mark in the next few weeks.
As for the factors driving Bitcoin’s rise, blockchain expert Anndy Lian summarized that the upcoming US presidential election, with Trump currently leading He Jinli by a large margin, brings hope for a favorable regulatory outlook in the cryptocurrency field. On the other hand, major economies including the United States, Europe, and China are implementing loose monetary policies, and risk markets including Bitcoin will see an influx of capital.
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