- More Bitcoin tokens are leaving exchanges.
- That suggests a lowering selling pressure in the BTC market.
- Meanwhile, a technical rebound suggests BTC will hit $50K next
YEREVAN (CoinChapter.com) — The amount of Bitcoin (BTC) held by all crypto exchanges dropped to its lowest level since August 2018 as its price rebounded sharply to hint at an extended move towards $50,000.
Bitcoin ‘supply squeeze’ underway.
Crypto exchanges now hold only 2.43 million BTC versus 3.14 million BTC in May 2021, data from Glassnode shows.
In theory, the decreasing Bitcoin balance across all exchanges reflects traders’ willingness to ‘hodl’ BTC long-term. That is primarily due to their habit of depositing tokens at exchanges only when they wish to trade them for fiat or crypto assets.
The dropdown in exchange balances coincides with the rise in non-zero Bitcoin addresses, i.e., wallets holding some BTC. Notably, around 41.47 million addresses — a record high — have Bitcoin in them, hinting at a growing retail demand for the cryptocurrency.
Similarly, Bitcoin addresses that hold at least 1, 10, 100, and even 1,000 BTC have experienced minor spikes — and then stabilization — over the past few weeks. That suggests a renewed institutional interest in the market even as BTC’s price wobbles around $40,000 following its drop from $46,000 in the last two weeks.
An analyst at data resource Ecoinometrics, Nick says that investors sitting atop large piles of Bitcoin should forget about them, a strategy commonly practiced by traders with less than 10 BTC across their wallets.
“Until we have a good old recession or a market crash, the playbook is likely to remain the same,” the analyst explained, adding:
“Small fish stack sats and wait for the big wave. Whales trade in and out of “small” moves to make bank.”
Next target: $50K?
The call to hold Bitcoin comes as it rebounds after testing a key upward sloping trendline as support. Interestingly, the line constitutes a ‘bear flag’ pattern in conjugation with another parallel trendline, acting as resistance.
In detail, bear flags are bearish continuation patterns that resolve after the price breaks out to the downside and falls to a level at length equal to the height of the previous downtrend (called the “flagpole”). Bitcoin had fallen sharply before forming its bear flag. Therefore, its overall bias in the medium-term remains skewed to the downside, as shown in the chart below.
But Bitcoin’s rebound from the flag’s lower trendline suggests that it would bounce higher towards the upper trendline. That raises its possibility to hit $50,000, albeit its follow-up could be a sharp pullback toward the flag’s lower trendline near $40,500.
Meanwhile, the bear flag target comes to be near $33,000.