CoinGlass data shows that 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 trend changes.
With the dual push of the Federal Reserve’s interest rate cuts and relaxed monetary policies, 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 highly anticipated.
CEX Bitcoin reserves hit a historic low
Currently, the most concerning question 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, indicating that the current Bitcoin reserves on centralized exchanges are about 2.43 million coins, once again hitting a historic low. As the Bitcoin reserves of exchanges continue to decline, it may indicate that investors are more inclined to transfer Bitcoin to cold wallets, thereby limiting market supply and potentially signaling a rise in Bitcoin prices.
However, as time goes on, let’s verify whether “Bitcoin reserves on exchanges” can really be used as an indicator to judge the trend of Bitcoin.
According to CoinGlass data, after Bitcoin reached a historic high of $73,000 in March this year, its reserves have been declining, 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. In the past, when Bitcoin liquidity was not as good, this indicator may have had enough reference value. However, with the development of the market and the birth of Bitcoin OTC market, futures, and spot ETFs, the reference value of this indicator may be weakening, or at least the correlation has decreased. Therefore, investors are urged to evaluate from multiple perspectives.
Analyst: Bitcoin will surpass $70,000 in the next few weeks
Regarding the future market of Bitcoin, Jonathan de Wet, the Chief Investment Officer of Zerocap, expressed optimism in a research report on 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:
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 factors driving the rise of Bitcoin, blockchain expert Anndy Lian summarized that the upcoming US presidential election, where Trump is 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 US, Europe, and China are implementing loose monetary policies, and risk markets including Bitcoin will attract capital inflows.