Bitcoin foreign exchange (BTC) reserves continue to shrink, indicating that private investors and whales may accumulate.

According to CryptoQuant, the reserves of all exchanges have decreased to 2.4 million BTC, which equates to $ 25 billion. In contrast, there were around 2.8 million BTC on the exchanges in October 2019, which is currently worth $ 30 billion.

There has been a clear reduction in pressure from whales and private investors.
Foreign currency reserves increase when investors deposit bitcoins. Typically, deposits or inflows are considered selling pressure because traders have to send BTC to stock exchanges to sell.

Thus, when the currency flow decreases, it often means that investors’ willingness to sell BTC decreases.

Another chart from CryptoQuant shows the trend of net Bitcoin flows to exchanges over the same time period.

Over the past two months, the net outflow has remained largely negative at 20,000 BTC. Net capital inflows have declined in recent weeks, especially as Bitcoin rose from $ 10,300 to more than $ 10,700.

On September 26, Cointelegraph reported that large flocks of whales totaled $ 10,407. Whale groups form when whales accumulate new Bitcoins and don’t touch them. Cluster groups usually indicate that whales have begun to congregate in a new area.

Given the trend of accumulation and stamina of BTC over $ 10,000, investors are probably unwilling to sell.

With no desire to sell BTC at current prices and constant build-up, BTC is on its way to a solid quarterly end.

Another possible cause of the sharp drop in net traffic flows could be major breakouts. Recently, KuCoin was hacked for $ 150 million after breaking the private keys of hot wallets.

BTC is on track for its second best quarter-end
According to Skew, Bitcoin is nearing its second best quarter-end. BTC closed the second quarter at around $ 9,140. It would have to stay above $ 10600 to secure the second spot on a quarterly basis.

There are several reasons Bitcoin performed well in the third quarter. In particular, BTC merged with gold and stocks after the US approved the stimulus bill.

The first driver of market recovery after economic stimulus, coupled with low interest rates, created a favorable macroeconomic background. Deviant analysts said:

“Another day and still looks like the second best quarter ending for # bitcoin, but it’s a challenge soon with Q2 2020.”

At the end of the year, there are three main and macro factors that could support Bitcoin’s sentiment, which are the weakness of the dollar and the possibility of a stimulus package and a vaccine.

Meanwhile, the US dollar continues to show weakness against reserve currencies such as the yen, yuan and franc as the Federal Reserve has doubled relative to its average inflation targeting strategy.

But while the continued weakness in the dollar may put the US stock market in danger of defaulting from other markets, it should be in favor of bitcoin and gold, which are valued against the US dollar.

Source: CoinTelegraph