Bitcoin Rebounds Above $57,000 Amid Multi-Year Low in Exchange Reserves
Bitcoin experienced a slight dip to approximately $57,250 on Monday morning before rebounding to levels above $58,000, as reported by CoinGecko. The cryptocurrency’s price hit a low of $57,257.71 before recovering to $58,419.26, trading flat for the day and down 8.6% for the week due to ongoing outflows from investment products and a trend of decreasing exchange reserves.
Kristian Haralampiev, Structured Products Lead at Nexo, attributed the recent Bitcoin price drop to market concerns surrounding the upcoming release of U.S. non-farm payroll data and its potential impact on the Federal Reserve’s monetary policy.
Liquidation data from CoinGlass revealed that the crypto market saw $169.2 million in liquidations over the past 24 hours, with long positions accounting for $125.59 million of that total. Ryan Lee, Chief Analyst at Bitget Research, highlighted the significance of upcoming data releases such as initial jobless claims and unemployment rate data in influencing the Federal Reserve’s rate cut decision.
Despite short-term investment flows, a deeper examination of on-chain data indicated a positive long-term trend. Cryptocurrency exchanges globally now hold only 2.39 million BTC, valued at around $139.86 billion, representing a 25% decrease from their peak in 2020. This decline in BTC reserves on exchanges could suggest reduced selling pressure, potentially favoring a bullish market if demand continues to rise.
Furthermore, digital asset investment products faced negative sentiment last week, with outflows totaling $305 million according to a Coinshares report. Bitcoin saw $319 million leave investment products, while Ethereum experienced $5.7 million in outflows. Blockchain equities, however, saw $11 million in inflows, particularly into Bitcoin miner-specific investment products.
In summary, while short-term market fluctuations persist, the long-term outlook remains positive, with decreasing exchange reserves potentially signaling a bullish market sentiment for Bitcoin.
