The level of Bitcoin exchange inventory is a good way to gauge market sentiment towards the cryptocurrency. Tickets to exchanges in the past have generally indicated strong selling sentiment. From investors who want to collect the profits they have obtained. This is usually the case during bull markets when prices go up. But for the first time, bitcoin exchange inventory levels are declining even though the price of the digital asset is increasing.
Related reading | Bitcoin hot summer. But why are Altcoins on the mend?
The numbers show that bitcoin trading levels don’t increase according to price. If anything, the opposite appears to be the case. The amount of bitcoins coming off exchanges recently has increased dramatically. In the last 30 days alone, more than 100,000 bitcoins have left exchanges. It represents one of the largest falls in foreign exchange reserves in the market.
BTC exchange reserves experience sharp downtrend | Source: Twitter
Investors are piling up
The number represents a decreased supply in the market and the outputs indicate that the demand for the digital asset is increasing. Investors hold onto their coins instead of moving the coins to exchanges to sell them. This has now put a lot of buying pressure on the market. The decrease in supply will inadvertently lead to an increase in the price of the digital asset.
BTC exchange reserves fall for the first time in a bull market | Source: Twitter
These patterns show a peculiar accumulation pattern in the market. The accumulation of Bitcoin is usually higher when the market is in a bear market. An extended bear market like the one that followed the 2017-2018 bull market would see investors hoarding coins in anticipation of the next bull. But today, accumulation patterns show investors hoarding coins even in a bull market.
Sentiment remains generally positive with the fear and greed index finally moving toward greed for the first time in months. The accumulation patterns now show a very bullish pattern in the market. Retail investors don’t think the bull market will end soon, and neither do institutional investors.
As more bitcoins are mined, leading to a decrease in the number of bitcoins left to enter the market, investors are trying to get their hands on as many digital assets as possible. This increase in demand is what has caused the rise in prices. Leading to a continuation of the bull market that halved after the asset hit a new all-time high of $ 64K.
Bitcoin advances with accumulation
The price of Bitcoin has gone up and up until August. Its price had hit $ 45K for the first time in two months, which points to a continuation of the bull market. Eight consecutive green days had seen BTC hit eight green candles, causing a bull run in the market. At this point, the bulls had taken full control of the market. The bears had posted massive losses when the market saw more $ 1 billion of liquidated shorts within 24 hours.
BTC price trailing $44K | Source: BTCUSD on TradingView.com
The bulls have continued to maintain their grip on the market. The price of Bitcoin has experienced several declines in this week alone. But the downward movement on the charts has not been significant. The price had tested $ 48K this week. Eventually breaking below $ 44K again when it faces resistance at this level.
Final prices now rest in the $ 44K territory for BTC. Price analysis shows that the mark to beat for another rally sits at $ 46K with current momentum. As of this writing, BTC is currently trading at $ 44,470, with an overall market capitalization of $ 835 billion.
Featured image from Bitcoin News, charts from Twitter and TradingView.com