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Bitcoin ‘Black Thursday’ Repeat Unlikely as Exchanges Have Less BTC

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As Bitcoin (BTC) price pulled back below $12,000, some investors began to worry that another crypto market crash like one that occurred on March 11 would occur. 

However, data from CryptoQuant, an on-chain analysis firm, suggests otherwise, as Bitcoin exchange reserves hit a 2020 low. CryptoQuant CEO Ki Young Ju said:

“People keep worrying about the great sell-off like March, but exchanges don’t have as many idle Bitcoins (waiting to be sold) as that day.”

All Exchanges Reserve and MPI charts. Source: CryptoQuant

The Bitcoin exchange reserve metric shows how much BTC is being held at exchanges. When the figure reaches a low it suggests that investors have withdrawn their holdings from the exchange into a more secure and permanent storage. 

Data from Chainalysis, also shows that the amount of BTC held for to 52 weeks is on the rise. Furthermore, Glassnode, an on-chain analytics provider, recently observed similar behavior and said that “the decline of Bitcoin exchange balances signals reduced selling pressure.” 

At the time of writing, 2.6 million BTC are being held at exchanges, which is lower than the amount held before the March sell-off when the figure sat at 2.9 million BTC.

Miners are not selling

Data from CryptoQuant also revealed that miners are choosing to hold on to their current BTC supply. 

This suggests that miners expect higher prices and is a good indication of positive sentiment as miners constitute a significant portion of the Bitcoin selling pressure, they hold some influence over the Bitcoin price.

The Bitcoin hash rate has also been increasing, another bullish sign as more people see the BTC price as being reliable above their price of production, a factor that gives the hash rate and price a strong correlation. 

All Bitcoin Exchange Inflows

All Bitcoin Exchange Inflows. Source: CryptoQuant

While the number of BTC held by exchanges is at a 2020 low, data from CryptoQuant also shows that this figure may change soon as Bitcoin inflows to exchanges are on the rise. 

According to Ki Young Ju increasing amounts of BTC being sent to exchanges is typically a bearish sign. 

“BTC Inflows (netflows) into spot exchanges could indicate a potential sell pressure, stablecoin inflows indicate a potential buy pressure.”

While increased exchange inflows for Bitcoin are typically bad news, USDT transfers are also on the rise, according to data from Glassnode, having reached their 2020 high on Aug. 17.





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Traders look for Bitcoin price daily close at $41K to confirm bullish reversal

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Bitcoin started the week with a strong breakout to $40,900, but today bulls are trying to hold Bitcoin price above the $40,000 level. 

As the price broke from the $31,000 to $39,000 range on June 14, traders speculated that setting a daily higher high and a close above $41,000 would set BTC up for a move to $47,000, but a lack of sustained buy volume and the much-discussed possibility of a death cross between the 50- and 200-day moving average are factors that could be keeping traders cautious.

BTC/USDT daily chart. Source: TradingView

According to Simon Peters, an analyst at eToro:

“Bitcoin is at its highest level since May, a notable recovery but the crypto asset has yet to convincingly break through – and most importantly, close above – the $41,000 mark.

While sentiment has improved and futures premiums have recovered after nearly entering backwardation last week, analysts are unable to confirm that the bull trend has resumed.

Peters said:

“We’ve seen the price face resistance earlier in the year at this level when it was trading around what was then an all-time high, and I would really need to see a stronger increase to feel optimistic about the price recovering and possibly pushing onto $50,000 and beyond.”

Sentiment has improved but the market is flat

Deribit Bitcoin options 25% delta skew. Source: laevitas.ch

Regarding the lack of follow-through from Bitcoin’s June 14 pump, Cointelegraph analyst Marcel Pechman shared the above chart and said that while the 25% delta skew is no longer signaling that extreme fear exists in the market. 

Pechman said:

“Arbitrage desks and market markers are currently uncomfortable with Bitcoin’s price as the neutral-to-bearish put options premium is higher. However, the current 7% positive skew is far from the 20% exaggerated fear seen in late May.”

Even though day traders are on the fence about the status of the trend, a number of on-chain metrics, including the Hodler Net Position Change, show that investors still view the recent dip to $30,000 and Bitcoin’s current price at $40,250 as excellent purchasing opportunities.