Recent data from CryptoQuant has highlighted a significant drop in Bitcoin exchange reserves. They have reached the lowest levels recorded since the data began in October 2021.
In the past month alone, over 51,000 Bitcoins were redeemed from some of the largest cryptocurrency exchange platforms.
This trend indicates that investors are moving towards the long-term investment instead of the short-term investment. This is causing a reduction of liquid supply of the Bitcoin in the exchange market.
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Previous pumps have often coincided with the periods when the price of Bitcoin was appreciating. Investors considered it as a long-term investment asset. This is quite significant, especially considering the previous levels around October 2021 when the exchange reserves stood at around 3.2 million BTC.
The current numbers stand much lower than previous ones. This suggests that the market is still in the accumulation phase. That it is keeping more of the funds in safer storage rather than trading them on exchanges.
Rising Institutional Demand Fuels Market Shift
As reported by the CryptoQuant analysts, the number of new Bitcoin whales has recently grown significantly. These entities now own more than 1.97 million BTC. This accumulation by new institutional investors is not only through the spot Bitcoin exchange traded funds (ETFs). However, it consists of several significant subjects which are gradually starting to consider Bitcoin as a long-term asset.
Blockchain data from CryptoQuant shows that the total number of new institutional wallets (excluding miners and exchanges) that have added Bitcoin in the last 30 days has also risen.
This rising institutional interest is the main force behind the current bull run in the Bitcoin market. These large entities put in a lot of buying pressure.
Bitcoin Price Action Amid Institutional Buying
Institutional demand and new whales are on the buying spree. That is leading to a vibrant market condition where the price of Bitcoin is not pressured down.
Although it has recorded some volatility, the Bitcoin price has remained ranging, with only a minor increase, trading near $67,200 within the last 24 hours. This comes in the wake of massive outflows from exchanges. It shows that price stability is the new norm. More investors switch to seeing BTC as a store of value.
In the past, the entrance of new institutional investors has usually happen before the price rise. To this end, the participation of these entities may lead to the stabilization of prices in the market further down the line. More so, the price of BTC may undergo potential appreciation given the fact that the supply of Bitcoin on exchanges is decreasing.
As exchange reserves decline due to heightened institutional demand, the future market trajectory leans towards a bullish outlook. Institutional players’ strategic movement of Bitcoin into custody and long-term storage options reduces the immediate selling pressure.
Instead, the market is experiencing a foundational strengthening. Both retail and institutional investors align in their long-term confidence in Bitcoin.
At press time, Bitcoin price was $67,635. It experienced a slight increase of 0.24% over the past day, according to data from CoinMarketCap. The market cap has seen a minor uptick of 0.21%, reaching $1.34 trillion, as it continues to attract institutional interest.
Following the bullish signals, Bitwise CIO Matt Hougan, anticipated that the growing interests could surge BTC price to $200,000 mark by 2025. Hougan’s confidence is fueled by the positive impacts of the 2024 U.S. elections and increasing institutional interest, particularly with the advent of Bitcoin ETFs mirroring the early success of Gold ETFs.
