Bitcoin reserves on exchanges reach historic low, says CryptoQuant

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Bitcoin reserves on exchanges reach historic low, says CryptoQuant
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Bitcoin reserves on exchanges reach historic low, says CryptoQuant
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Bitcoin reserves on cryptocurrency exchanges have reached the lowest level since CryptoQuant began monitoring in October 2021. According to recent data, users withdrew more than 51,000 Bitcoins from major exchanges in the last month. This has reduced the available net supply and indicates that investors are moving their assets into long-term storage wallets.

This movement of Bitcoins leaving exchanges for cold wallets (cold storage) has been occurring for several years. Possibly, this has to do with the rise in the price of BTC and factors such as the approval of spot Bitcoin ETFs and the expectation surrounding the cryptocurrency’s next halving event.

As of October 2021, Bitcoin reserves on exchanges were around 3.2 million units, which represents a drop of approximately 590,000 coins since then.

According to Julio Moreno, head of research at CryptoQuant, the decrease in Bitcoin reserves on exchanges this year is partly related to the distribution of Mt. Gox’s assets to its creditors, in addition to the reduction in Coinbase’s reserves.

Bitcoin reserves on exchanges plummet

“Coinbase reserves are going to custody in specific wallets, possibly from large institutional investors, which reduces selling pressure on Bitcoin,” Moreno explained in an interview with The Block.

Moreno further highlighted that when excluding data from Mt. Gox and Coinbase, overall exchange reserve levels for 2024 appear more stable, suggesting that the current drop is mainly concentrated in these two sources. The decline in reserves coincides with an increase in Bitcoin accumulation by new institutional participants.

CryptoQuant data shows that institutional wallets, which exclude miners and exchanges, have increased their Bitcoin accumulation over the past 30 days.

“The buying pressure of these new accumulations is unprecedented. New whales are pushing Bitcoin prices higher by buying more. These new whales currently hold around 1.97 million Bitcoins,” CryptoQuant community analyst JA Maartunn told The Block.

He highlighted that these acquisitions are not limited to spot Bitcoin ETFs, but also involve other large investors.

CryptoQuant highlighted that a dynamic is occurring in which large investors continue to accumulate coins. Meanwhile, small investors are reducing their positions. According to CryptoQuant analysts, this trend could deplete retail sales strength, which may subsequently attempt to repurchase Bitcoins at higher prices when market sentiment becomes more optimistic.

Bitcoin reserves on exchanges reach historic low, says CryptoQuant

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Bitcoin reserves on exchanges reach historic low, says CryptoQuant

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