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.
(Previous context:
Arthur Hayes: Bitcoin’s opportunity for a sharp rise lies in the Middle East war.)
(Background information:
Trump’s victory indicator: Polymarket leads He Jinli by 20%, showing a positive correlation with Bitcoin’s trend.)
Under the dual promotion 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 high in price since July 30, which is promising.
CEX Bitcoin reserves hit a new historical low
Currently, the most concern for investors is whether the upward trend of Bitcoin will continue. After all, it has risen by more than 15% in the past week.
In response to this, Cointelegraph posted a picture on the social platform X yesterday, indicating that the current Bitcoin reserves on centralized exchanges are about 2.43 million coins, once again reaching 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, perhaps foreshadowing a rise 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 the price of Bitcoin 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 the trend of Bitcoin. The author believes that when Bitcoin’s liquidity was not as good in the past, this indicator may have had sufficient reference value. However, with the development of the market, coupled with the emergence of Bitcoin OTC markets, futures, and spot ETFs, the reference value of this indicator may be weakening, or at least the correlation has decreased. Therefore, it is recommended that investors evaluate from multiple perspectives.
Bitcoin exchange reserves and price trend chart. Image source: Coinglass
Analyst: Bitcoin expected to surpass $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 this Wednesday (16). He believes that the upward trend of Bitcoin is still strong and is expected to surpass the $70,000 mark in the next few weeks.
As for the factors that contribute to the rise of Bitcoin, 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 attract capital inflows.
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