Bitcoin exchange reserves reach new yearly low amid $60K price retest
|The amount of Bitcoin stored on crypto exchanges has reached a new supply low, which may be the catalyst that Bitcoin needs to successfully retest and move back above $60,000.
“With Bitcoin reserves on exchanges hitting new lows for the year, this could indicate reduced selling pressure, potentially favoring a bull market if demand also continues to grow,” CryptoQuant contributor Gaah highlighted in an Aug. 29 analyst note.
The year-to-date high for Bitcoin supply on exchanges was just over 3.05 million. Source: CryptoQuant
According to CryptoQuant data, Bitcoin (BTC $59,321) reserves on exchanges have decreased by approximately 12.9% since Jan. 1, leaving 2.62 million Bitcoin across all major crypto exchanges.
Gaah reiterated that Bitcoin moving to cold wallets “generally indicates” that investors are committed to holding the asset long-term and are optimistic about its price potential.
The declining Bitcoin supply on exchanges follows recent analyst suggestions that history indicates Bitcoin’s price will rally in the fourth quarter of 2024.
Meanwhile, Gaah added that the increase in long-term Bitcoin holders will lead “to a more resilient market, less prone to large panic sales.”
When there is less Bitcoin available on exchanges, there is less liquidity available for immediate sale.
Pseudonymous crypto trader MartyParty commented on the “ultra low” Bitcoin reserves in an Aug. 27 X post by saying that “something is happening.”
“The supply shock will come soon because this is not sustainable,” pseudonymous crypto commentator Bitcoin for Freedom told their 74,800 X followers, noting that the last seven days have seen 56,000 Bitcoin moved off crypto exchanges since Aug. 22.
At the time of publication, Bitcoin traded at $58,970, having retested the $60,000 key level just hours before, according to CoinMarketCap data.
Bitcoin is down 0.30% over the past 24 hours. Source: CoinMarketCap
It was recently revealed that long-term Bitcoin holders have spent over $10 billion to buy the asset and have been pulling back from selling since its price has declined from $69,000.
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