On-chain Shows Impending Bitcoin Surges as Exchanges Reserves Hit Record Lows
Crypto traders are ecstatic as the crypto exchange’ Bitcoin balance reached an all-time low nearly two months after the halving event. According to data from Coinglass, the total BTC balance collected from up to 20 crypto exchanges came to a total of about 2,491,771 at press time.
The crypto exchange balance breakdown is as follows: Coinbase Pro leads with a balance of approximately 890,444, followed by Binance with a balance of around 582,125, and Bitfinex among others.
What This Means For Bitcoin
The decrease in the Bitcoin balance in crypto exchanges indicates that more users or investors are moving their assets off exchanges into secure wallets for long-term storage, to hodl rather than trade.
As investors keep withdrawing their BTC from exchanges, the available supply decreases, creating a supply-demand imbalance that exerts upward pressure on the cryptocurrency’s value. This imbalance could potentially drive prices higher as buyers compete during the period of scarcity.
Various indicators suggest a potential upside in the apex coin’s value, setting the stage for future price appreciation. Investors might interpret this new development as a chance to ‘buy the dip’ and add more to their investment portfolios.
Recently, Fundstrat analyst Tom Lee told CNBC that BTC might possibly surge to $150,000 before the end of 2024. Lee, who is the co-founder and head of research at Fundstrat Global Advisors, had earlier made the same prediction about the asset, stating that factors like Bitcoin ETFs, the recent halving, and Fed rate cuts will fuel the price increase.
As bitcoin reserves on cryptocurrency exchanges continue to deplete, the likelihood of Lee’s prediction materializing grows more plausible.
Bybit Warned Scarcity was Imminent
Bybit crypto exchange noted in April that exchanges will run out of BTC in nine months. This is because, out of the 2 million Bitcoins inflow and approximate $500 million inflow into Bitcoin Spot ETFs per day, around 7,142 bitcoins leave crypto exchange reserves every day.
The US Securities and Exchange Commission’s (SEC) approval of the bitcoin spot ETF has catalyzed a significant increase in mainstream acceptance and investment in bitcoin, causing the Bitcoin reserves of crypto exchange to dwindle potentially leading to a price increase in the crypto asset.