According to Coinglass data, the Bitcoin reserves of centralized exchanges have reached a historic low. Does this imply that Bitcoin will further rise? This article will analyze the historical trends for you.
Under the dual driving forces 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, a new high since July 30th. The performance is promising.
CEX Bitcoin reserves hit a historic low
The current concern for investors is whether the upward trend of Bitcoin will continue. After all, it has risen by over 15% in the past week.
In response to this, Cointelegraph posted a picture on the social platform X yesterday, stating that the Bitcoin reserves on centralized exchanges are currently about 2.43 million coins, once again hitting a historic 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 and potentially foreshadowing a rise in Bitcoin prices.
However, as time goes by, let’s verify whether “Bitcoin reserves on exchanges” can really serve as an indicator for judging the trend of Bitcoin.
According to Coinglass data, after the price of Bitcoin reached a historic high of $73,000 in March this year, the reserves of Bitcoin have been declining, but the BTC price has not reached a new high, but has been fluctuating.
Therefore, in the short term, this indicator does not seem to be completely consistent with the trend of Bitcoin. In my opinion, when Bitcoin’s liquidity was not as good in the past, this indicator may have had enough reference value. However, with the development of the market and the emergence of Bitcoin OTC market, futures, and spot ETFs, the reference value of this indicator may be weakening, and at least the correlation has decreased. Therefore, it is suggested that investors evaluate from multiple perspectives.
Analyst: Bitcoin will break through $70,000 in the next few weeks
Regarding the future market of Bitcoin, Jonathan de Wet, the investment director of Zerocap, expressed optimism in a research report on Wednesday (16), stating that the upward trend of Bitcoin is still strong and is expected to break through the $70,000 mark in the next few weeks:
The technical breakthrough provides a solid foundation for further upward movement of Bitcoin. We expect Bitcoin to reach $70,000 in the next few weeks.
As for the driving factors behind the rise of Bitcoin, blockchain expert Anndy Lian summarized that the upcoming US presidential election, with Trump currently leading heavily over Biden, brings hope for favorable regulatory prospects 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.