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Tuesday, May 24, 2022

Bitcoin Price Goes Below $43K

Although the price of Bitcoin has gone below the mark of $43,000 on Monday, the outflow from its exchanges has gone on a multi-month trend. This has been particularly visible on Coinbase Pro. The last month has seen the amount of BTC held by the cryptocurrency exchange drop by around 28,843.87 BTC. At the same time, other crypto exchanges like OKEx, Kraken, Bitfinex, and Huobi, have also gone through a drop in their holdings of the cryptocurrency with the amount withdrawn having a sum total of 30,236 BTC across the board. 

Binance Bitcoin reserves buck the trend

Several on-chain analysts have already considered the falling reserves of Bitcoin to be a bullish signal. This is primarily due to most traders moving their assets of this cryptocurrency to exchanges only when there is a preference to trade them over other assets- be it altcoins or fiat currencies.

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This has resulted in the exchange balance serving as a metric that would gauge the sentiment of the traders for the underlying asset. As a result of this, the declining reserves of BTC on Coinbase Pro do hint at the intention of the trader to hold on to the cryptocurrency rather than sell it. But since then, Binance has been crashing the party. 

As the leading crypto exchange in the world, Binance does enjoy certain clout in the cryptocurrency market due to the outreach it has. The exchange’s increasing Bitcoin reserves dow balance the notion that users could definitely sell an increasing amount of cryptocurrency tokens- which is the opposite trend seen on Coinbase.

The increment of Bitcoin on Binance also meets with the premium bids on the USD exchange rate, with the spot price of BTC being around $400 higher on the Binance than Coinbase Pro. This huge difference has led to the creation of arbitrage trading opportunities which coincides with the BTC reserves adding around 1,529 BTC in the last 24 hours. 

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