A significant amount of Bitcoin left
A CryptoQuant Quicktake released by CryptoQuant analyst Maartunn yesterday revealed that Bitcoin exchange reserves have plunged to a four-and-a-half-year low.
Bitcoin Leaves Exchanges, But It May Not Be Bullish
Per the analysis, reserves had plunged from 2,304,000 BTC to 2,265,000 BTC, representing a difference of 39k BTC. Usually, moves like this indicate bullish sentiment in the markets, as users may be less willing to sell their Bitcoin. However, it may not be the case here.
Notably, the two exchanges involved are
Maartunn, in a tweet on Monday, disclosed that over 18k BTC had been moved from Coinbase Pro. While stating that further investigation was needed, users noted that it was likely an internal transaction by Coinbase as it winds down its Coinbase Pro service for Coinbase Advanced Trade.
For FTX, the analyst had raised the alarm noting that the Bitcoin Reserve balance on the exchange had dropped to zero. Notably, for this, the data is contradictory. While CryptoQuant’s chart showed that it had fallen to zero, Glassnode’s QuantMario sharing the Glassnode chart, disputed Maartunn’s claim. The Glassnode chart showed that it had only dropped to about 9k BTC. Meanwhile, another CryptoQuant analyst sharing the CryptoQuant Pro chart noted that while the reserve had seen a significant drop, it was not yet at zero but hovering around 70 to 120 BTC.
While the reason for the drop is unknown, analysts hope that it is an internal shuffling of funds and not an exit liquidity scam. Notably, a question raised by WuBlockchain makes Maartunn speculate that it may be a movement of funds to facilitate client withdrawals as the exchange is experiencing a run in the wake of insolvency fears.
It is worth noting that despite plummeting prices, this year has seen a steady trend of declining exchange reserves. For example, as reported by The Crypto Basic at the end of October, 70k BTC left exchanges in a single day on October 26. Furthermore, as a Documenting Bitcoin tweet highlighted today, “hodling” appears to be all the rage this year, as 66.5% of Bitcoin has not moved in over a year.
The Price Outlook
It is worth noting that Bitcoin today has plunged below $20k. IncomeSharks attributes the steep price decline to fear, uncertainty, and doubt perpetuated by the FTX saga. According to IncomeSharks, markets are “scared.” Notably, the analyst had expected the leading digital asset to bounce today. Instead, however, the price has continued to invalidate perceived support levels.
Meanwhile, il Capo of Crypto has now taken a U-turn on his prediction of a bounce to $21,500. According to the analyst, a retest of the $20k to $20,200 price point would be significantly bearish. The target of these price moves for the analyst remains $14k.
Moments ago, the analyst ominously tweeted, “The beginning of the end.”
The beginning of the end.
— il Capo Of Crypto (@CryptoCapo_) November 8, 2022
Bitcoin is trading at the $19,747.82 price point, 4.65% lower in the last 24 hours.