Bitcoin is grappling to break above the $60,000 threshold. The world’s largest cryptocurrency by market cap has yet to recover from this week’s earlier decline, leading to weekly losses of approximately 10% compared to last Friday’s surge. Despite this, a significant drop in exchange reserves is painting a potentially bullish picture for the market.
Bitcoin’s Exchange Reserves Hit Yearly Lows
According to CryptoQuant, Bitcoin’s dwindling reserves on exchanges indicate reduced selling pressure, which could set the stage for a bullish market if demand continues to rise. A key factor behind this decline is the growing trend of self-custody, where more investors are choosing to store their BTC in cold wallets, giving them greater control over their assets.
With fewer Bitcoins available on exchanges, liquidity shrinks, making immediate sales less feasible. This trend suggests a market increasingly dominated by long-term investors who are holding onto their assets in anticipation of future price appreciation. As a result, the market becomes more resilient, with a reduced risk of sudden panic-induced sell-offs.
In the past 30 days, long-term holders have increased their supply by 262,000 BTC. According to CryptoQuant’s data, this group now controls 14.82 million BTC, accounting for 75% of the total supply. This growing dominance underscores the strong conviction among investors who remain steadfast despite the current market downturn.
A Strategic Buying Opportunity for Bitcoin Investors
In another analysis, the on-chain analytics platform revealed that the current hash price, which measures miner profitability, has dropped to its lowest levels. Historically, such periods have often coincided with Bitcoin price bottoms, suggesting that the current low hash price could indicate the cryptocurrency is nearing a bottom as well.
This scenario presents a potential buying opportunity for investors, further bolstering the case for a much-needed market rebound.
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