Bitcoin has struggled to make gains over the past month, with a short entry over $50,000 proving to be short-lived even as one of the major banks predicted that the price of Bitcoin could soon double.
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Bitcoin price reached $52,000 per bitcoin early last week before crashing below $45,000 as the viral plan failed to prop up the bitcoin price. The crash wiped out about $300 billion from the combined bitcoin and cryptocurrency market, which is currently hovering around $2.1 trillion.
Now, data has revealed bitcoin exchange reserves, and the amount of bitcoin held on the likes of Coinbase and Binance, has fallen to less than it was in November last year — when the bitcoin price began its massive run that peaked at around $65,000 in April.
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Bitcoin exchange reserves reached new multi-year lows this week, data from cross-chain analytics outlet CryptoQuant showed, meaning there is little supply of easily-sellable bitcoins in the market. Low bitcoin exchange reserves happen when investors move their holdings from exchanges to storage.
Marcus Sotirio, a trader at UK-based digital asset broker Global Block, wrote, “The cryptocurrency markets have shifted into a range-bound environment since the crash last week, between $43,000 and $47,000, with no strong control over bulls or bears.” On a note but referring to data that showed large bitcoin holders, known as whales, increased their holdings “by nearly 44,000 bitcoins in the last week, and 103,600 bitcoins in the past three weeks” — describing the data as “bullish.”
On Monday, business intelligence software company Microstrategy
Sotiriou writes, “This means that we may see a significant influx of institutional bitcoin purchase announcements over the coming weeks or months.” [are] unknown.”
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Meanwhile, technical analysis shows that Bitcoin price is on the cusp of a so-called golden cross, where the 50-day moving average is above the 200-day moving average. While this is not necessarily a bullish sign and may be a lagging indicator, some believe that the golden cross could provide support for a new rally higher.
Alex Kuptsikevch, chief financial analyst at FxPro, wrote in an email comment: “The cryptocurrency market does not appear to be oversold to be unequivocally attractive to buy in the short and medium term, but it is already showing signs of buyer interest.”
“Bitcoin gained systematic support this month on the downside of its 200-day simple moving average, which is now passing near $44,300. In early August, the rally from this curve started to rally 40% over the next five weeks.”