Bitcoin (BTC) foreign exchange reserves are shrinking as analysts point to a trend towards a shortage of sellers. After the March accident, foreign exchange reserves fell from 2,950,000 BTC to 2,700,000 BTC.
In just seven months, a 250,000 BTC reduction in foreign exchange reserves means a $ 2.85 billion reduction. There may be two main factors behind this sharp trend: a reduction in the number of sellers and a reduction in confidence in the stock exchanges.
Is the number of Bitcoin sellers declining in the accumulation phase?
Analysts often attribute the continued decline in bitcoin foreign exchange reserves to a general shortage of sellers in the market.
Since retailers refrain from selling BTC at current prices, institutions also buy more BTC. The simultaneous decline in sales pressure and higher consumer demand is an optimistic trend for Bitcoin.
A trader under a pseudonym known as Oddgems said the data shows that Bitcoin is likely to go from stock exchanges to non-portfolio portfolios. In that case, it means that investors transfer their money for a longer period. He said:
“More and more #Bitcoin is leaving the stock exchanges and is more likely to be converted to dishonest portfolios. This indicates a little less liquidity and less selling pressure in the future.”
This position was supported by Michael Van de Pope, a trader on the Amsterdam Stock Exchange.
He emphasized that the inflow of BTC from stock exchanges is increasing as institutions’ cash reserves flow into Bitcoin. It is without:
“To be honest, more and more BTC coins are leaving exchanges for storage in a cold wallet. The big listed companies are investing cash reserves in bitcoins. It’s incredibly optimistic.”
The confluence of Bitcoin’s weak retail flow and continued demand from institutions keeps public sentiment around BTC alive.
Similarly, Dan Tabiro, co-founder of 10T Holdings, said that “bitcoin shortages” are possible due to increased institutional interest.
Other purchasing calculations indicate higher HODLer activity.
According to Glassnode, most of the bitcoin supply is stored in ‘storage addresses’. These addresses represent users who have never transferred BTC from their wallet, but who have probably had BTC for a long time.
When HODLing activity is high, which means that BTC is kept for long periods, this usually indicates the beginning of the build-up phase. Glassnode said:
“Bitcoin accumulation has been in a continuous upward trend for several months. Currently, 2.6 million BTC (14% of the offer) is stored in cumulative addresses. Accumulation addresses are defined as addresses with at least 2 incoming text and have never used BTC.”
The positive foundations of the network complement Bitcoin’s preferred technical architecture. Despite various events that could push BTC sales, including the BitMEX probe and the suspension of OKEx withdrawals, BTC remains above $ 11,400.
The controversy between BitMEX and OKEx has also led to a sharp fall in foreign exchange reserves, which could scare traders. While BitMEX processed withdrawals quickly and OKEx portfolios did not show concern, uncertainty in the authorities was sufficient to trigger a fall in foreign exchange reserves.
In early October, technical analysts identified the $ 11,100 to $ 11,300 range as the critical area for short-term resistance. BTC has been relatively stable over the specified area, which is technically a positive sign of renewed speed.