Bitcoin – Here’s what its new ‘5-year low’ means for BTC’s run to $100K
The post Bitcoin – Here’s what its new ‘5-year low’ means for BTC’s run to $100K appeared on BitcoinEthereumNews.com.
Despite corrections, Bitcoin’s price has remained firmly around the $90,000 zone Crypto’s price could hike well beyond this level soon Bitcoin’s (BTC) exchange reserves have dropped to their lowest level since November 2018, reflecting a significant shift in market dynamics. This milestone was recorded soon after the crypto’s price surged past $91,000, supported by rising demand. Needless to say, the confluence of these factors raises critical questions about the market’s liquidity and what this trend means for Bitcoin’s future. Bitcoin exchange reserves and liquidity dynamics Total Bitcoin reserves on exchanges fell to 2.57 million BTC, as highlighted by CryptoQuant’s chart. This level was last seen during the accumulation phase before the 2020-2021 bull run. Historically, declining exchange reserves indicate a fall in selling pressure as more BTC is moved to private wallets. This can be interpreted to allude to a strong accumulation trend among long-term holders. Source: CryptoQuant With Bitcoin’s price climbing to $91,000, this drop in exchange reserves underlined constrained supply against a backdrop of growing demand. If reserves continue to fall, liquidity could tighten further, potentially amplifying price volatility in the near term. However, this can also set the stage for a sustained rally, especially as available BTC for trading diminishes. Derivatives data – Bitcoin Open Interest hits new highs The Open Interest across all exchanges climbed to $26.8 billion, as per CryptoQuant’s data. Such a sharp hike reflected heightened speculative activity, especially since Bitcoin’s price seems to be approaching uncharted territory. The Open Interest rising alongside a rising price is typically a bullish indicator – A sign of growing market participation and optimism. Source: CryptoQuant However, such elevated Open Interest levels warrant caution. Historically, sharp movements in price often lead to liquidations, particularly when leverage builds up. Monitoring funding rates alongside the Open Interest will be critical…
Filed under: News - @ November 16, 2024 8:15 pm