Bitcoin Reserve on Central Crypto Exchanges Hits 5-Year Low!

• According to the Bitfinex Alpha Report, there are currently only 2.03 million BTC in exchanges. Bitfinex noticed a correlation between the decrease in exchange reserves and rising crypto prices.
• Bitfinex reported that BTC reserves have been declining since March 2020, when they reached a peak, and during this period, the asset’s price began to rise.
• Holders of 12-18 month reserves are now in a position to make a profit on some of their holdings, but long-term and short-term holders’ reserves have remained dormant.

Bitcoin closed September in green and made a good start to October: According to Bitfinex’s report, stock market reserves are decreasing!

Bitcoin Reserve on Exchanges Continues to Decrease

The latest edition of the weekly market report by crypto exchange Bitfinex shows that Bitcoin (BTC) reserves on central exchanges have dropped to levels not seen since January 2018.

According to the Bitfinex Alpha Report, there are currently only 2.03 million BTC in exchanges. Bitfinex noticed a correlation between the decrease in exchange reserves and rising crypto prices, suggesting that the market may be entering a bullish run.

Bitfinex mentioned that BTC reserves have been declining since March 2020, when they reached a peak, and during this period, the asset’s price began to rise. The high in reserves aligns with the start of a bull market and appears to indicate a potential inverse relationship between BTC’s price and exchange reserves.

As crypto prices have been rising, exchange reserves have continued to decline, giving the impression that BTC is becoming scarce on trading platforms. However, the ongoing decrease in BTC’s price and exchange reserves was a situation that raised questions about the relationship, indicating that investors might hold less BTC during bear markets.

Nevertheless, many market indicators suggest that a significant portion of both long-term holders and short-term investor groups are currently in a HODLing phase, positioning themselves to hold assets for an extended period.

Multiple Investor Groups Positioning for a Bull Market

Reserve holders in the 12-18 month category are currently in a position to profit from some of their assets, while long-term and short-term holders’ reserves remain stagnant. Bitfinex noted that this indicates the confidence among different investor groups that BTC will not see a significant drop from its current price.

In particular, Bitfinex analysts found that a green October followed three events in which BTC positively closed September. Historically, a positive September leads to a bullish October, and volatility along with futures market metrics indicate increased volatility and some positive outlooks, at least on longer timeframes.

“What matters is that we’ve closed September in green, which is a rare occurrence. Historically, a positive September leads to a bullish October, and volatility along with futures market metrics indicate increased volatility and some positive outlooks, at least on higher timeframes,” said the analysts.