The Bitcoin market appears to have taken an interesting turn as asset reserves on centralized exchanges have reached their lowest levels since November 2018.
This development, Highlight By a CryptoQuant analyst known as G aah, it indicates a noticeable change in BTC investor behavior within the cryptocurrency space and also suggests an interesting trend for Bitcoin.
Bitcoin reserves on exchanges reach their lowest level in five years
According to the analyst, Bitcoin reserves on exchanges have diminished significantly throughout 2024, reflecting a shift towards long-term holding strategies among market participants.
This trend indicates that investors are increasingly moving their assets into private wallets, reducing the supply available for immediate sale and contributing to buying pressure in an already supply-constrained market.
According to Gaah, this behavior indicates a broader shift in sentiment, with market participants showing increasing confidence in Bitcoin as a store of value amid “economic uncertainty and rising inflation.”
By moving Bitcoin away from exchanges, investors reduce the possibility of sudden sell-offs, which could lead to increased price stability. However, decreased supply on exchanges may also lead to increased volatility, especially if demand continues to grow or remains constant.
A CryptoQuant analyst noted the following:
However, this scenario points to a more volatile but more resilient Bitcoin market, with less selling pressure and increasing dominance of long-term holders, which could open the way for new price peaks.
BTC’s bullish momentum is cooling down
After an all-time high (ATH) of $93,477 on Wednesday, November 13, BTC has faced quite a noticeable correction, now down 4% from this peak. So far, the asset has been unable to continue its upward momentum and appears to be witnessing further selling.
As of writing, Bitcoin is trading at just under $90,000 with a current trading price of $89,779, down 1.4% in the past day. This price decline resulted in a roughly $49 billion deduction from Wednesday’s market capitalization assessment.
For context, as of today, Bitcoin’s market cap is $1.775 trillion, down about 5% from the $1.835 trillion valuation two days ago. Bitcoin’s daily trading volume has fallen from more than $100 billion earlier this week to less than $85 billion.
Besides the implications on market capitalization and trading volume, Bitcoin’s decline has significantly affected a few traders. according to Data From Coinglass, In the past 24 hours alone, approximately 170,215 traders were liquidated, bringing the total liquidations in the cryptocurrency market to $510.13 million.
Of this total liquidation, Bitcoin is worth $132.43 million, with the majority of liquidations coming from long positions – those betting that the bullish momentum will continue.
Featured image created with DALL-E, chart from TradingView