The Impact of Bitcoin Reserves Decreasing on Exchanges on Its Price in October 2023
Date: 2023-09-28 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
The recent decline in Bitcoin reserves on exchanges has caught the attention of the cryptocurrency market. This event could have a significant impact on the price of Bitcoin in October and in the long term. Let's explore the factors and trends that may influence the dynamics of the cryptocurrency market.
Recent decline in Bitcoin reserves
Since the beginning of September 2023, we have witnessed a remarkable phenomenon where Bitcoin holders are actively moving their funds from cryptocurrency exchanges to long-term storage. This trend has raised concerns among investors and analysts.
It's important to note that historically, Bitcoin prices often rose when exchange reserves decreased. However, recently, there has been an opposite trend with prices declining. Why is this happening?
The role of institutional investors
One of the key factors to consider is the active accumulation of Bitcoin by institutional investors. They see the potential in cryptocurrency and understand its value as a long-term asset. However, they prefer to store their assets in more secure conditions rather than on exchanges.
This factor has led to a significant reduction in the supply of Bitcoin on exchanges. According to data, currently, only 5.83% of the total BTC in circulation is held on cryptocurrency exchange wallets, which is the lowest level since the end of August.
Trading activity
However, despite active accumulation, Bitcoin prices are still declining. This may be due to bearish sentiment in the market and reduced trading activity.
Data shows that the daily trading volume of Bitcoin has decreased by 57% since the beginning of September. This suggests that many investors are staying on the sidelines, possibly due to market uncertainty.
Possible perspectives
Given the current market situation, it's worth considering what perspectives may emerge for Bitcoin in October and beyond.
According to analysis, bulls may take advantage of the decrease in exchange supply of Bitcoin to push the cryptocurrency's price up to the $30,000 level. This could become a reality if Bitcoin manages to overcome resistance at the $28,500 level.
The information is also supported by data on the price distribution of current holders, which indicates a relatively low supply in the market.
