The Bitcoin balance on exchanges reaches a 3-year low at 2.3 million BTC, the lowest since 2018. That scenario may mean that the strong selling wave seen a few days ago is over.
Bitcoin (BTC) has traded between USD 20,000 and USD 21,900 for five consecutive days, reaching higher lows. However, its price has not yet been able to exceed the USD 22,000 line.
That scenario reflects that the selling force of Bitcoin seen when its value dropped to USD 18,000 has stopped. The rise in its price to almost USD 22,000 indicates an increase in demand and long-term holding. It is thus possible to perceive a change in the behavior of traders.
According to data from Glassnode, the Bitcoin balance on cryptocurrency exchanges is 2,384,477,040 BTC. That figure, the lowest since 2018, indicates that many traders are not on trading platforms. That happens because selling their holdings does not interest them as much as a few days ago.
The Low Bitcoin Balance on Exchanges Reveals Long-Term Holding
Little Bitcoin inventory on exchanges usually means that traders are holding/storing their funds for the long term. In that way, they speculate that the price of their tokens will increase over time.
For example, MinimalTrader has taken advantage of the drop in the price to buy and hoard more BTC. After five years of experience in Bitcoin trading, he considers those buying the cryptocurrency amid the current bearish market lucky. He thinks its price will become much lower and that this challenging downward scenario allows learning a lot.
It is also possible to see that the purchase of Bitcoin by the whales (long-term investors) increased over the last few days. That has happened precisely among those having between 1,000 BTC and 10,000 BTC. Analyst JCoiners said it is only a matter of time for the reaction of this trend to break the bearish market.
That scenario shows the bullish sentiment in the Bitcoin market amid a bearish cycle that has lasted seven months. Therefore, this might be the beginning of the recovery in the price of BTC, as Binance CEO Changpeng Zhao believes.
Last week, the leader of Binance said that he believed the worst part was over. He considers the drop in the Bitcoin price to USD 18,000 was the bottom of the cryptocurrency for this season. Economist Jose Sarasola explained the wave of fear sales or loan leverage characterizing this season might have ended.
He stressed that those investing in Bitcoin must be ready to withstand this storm. Likewise, he stated that the worst financial crisis in history lasted 25 months, but the bearish trend of Bitcoin began seven months ago.
According to the Fear and Greed index, there is still extreme fear in the market. For that reason, the Bitcoin capitulation may not be over yet. It will be necessary to see if the demand for the cryptocurrency consolidates to start a new bullish run. Otherwise, there might be lower prices in the short term.
BTC is trading at around USD 20,920 and has accumulated a 2.0% gain over the last seven days. While its daily trading volume is above USD 18.51 billion, its market capitalization is about USD 399.14 billion, according to CoinGecko.
By Alexander Salazar
