The net number of Bitcoins (BTC) stored on the wallets of centralized cryptocurrency exchanges is one of the crucial on-chain metrics for the flagship cryptocurrency.
Bitcoin (BTC) reserves on exchanges are targeting three-year lows
Lark Davis, seasoned cryptocurrency evengelist and investor, shared charts that display the dynamics of Bitcoin (BTC) reserves of centralized exchanges in correlation to its price.
As per this chart derived from the data of top-tier on-chain data vendor Glassnode, this crucial metric is in a downtrend since the third reduction of Bitcoin emissions in May 2020.
This process stopped only in early Q3, 2021, when a number of holders decided to cash out their rewards. However, the BTC balance on exchanges has been plummeting again since August 2020.
Right now, it is significantly lower than in early 2019. For the first time in almost 40 months, BTC balances on exchanges dropped below 2.5 million Bitcoins.
Bitcoin (BTC) plunges to $53,500 as bloodbath intensifies
Mr. Davis interprets these dynamics as clear bullish sign. Typically, the reduction of BTC balances on CEXs is associated with the lack of interest in immediately selling coins.
As covered by U.Today previously, today, Bitcoin (BTC) dropped to an eight-week low. Its price briefly touched $53,500 level unseen since Oct. 7.
More than $670 million in Bitcoin (BTC) shorts and longs have been liquidated in the last 24 hours. For many analysts, today's situation resembles the dramatic circumstances of March 2020.