Bitcoin Declines Below $22,000 As Coinbase Deposits Rise
10 Februar 2023 - 02:30PM
NEWSBTC
Bitcoin has declined below $22,000 in the past day as on-chain data
shows deposits have risen on the crypto exchange Coinbase. Bitcoin
Coinbase Exchange Reserve Has Risen Recently As pointed out by an
analyst in a CryptoQuant post, the exchange reserves have been
going up recently. The “exchange reserve” is an indicator that
measures the total amount of Bitcoin currently being stored in the
wallets of a centralized exchange (or a group of them). When the
value of this metric goes up, it means investors are depositing
their coins to the exchange right now. If the platform in question
is a spot exchange, then the reserve showing this trend could be
bearish for the price of the crypto, as investors usually use spot
exchanges for selling purposes. On the other hand, a decreasing
reserve can imply holders are withdrawing their coins from the
exchange currently. Generally, holders take out their coins to cold
wallets for holding onto them for extended periods. Thus, such a
trend can be bullish for the price in the long term, as it means a
reduction in selling pressure for the asset. Now, here is a chart
that shows the trend in the Bitcoin exchange reserve specifically
for Coinbase and Binance, as well as that for all spot and
derivative exchanges, over the last couple of weeks: The different
versions of the exchange reserve metric | Source: CryptoQuant The
quant posted the above chart yesterday and it seems like at that
time, Coinbase’s Bitcoin exchange reserve had seen a sharp rise.
Binance’s reserve had also seen a small increase, but it was much
less in scale compared to the inflows Coinbase observed. Related
Reading: Small Cap Altcoins Outperform Bitcoin As GRT Registers
117% Gains The version of the indicator for all spot exchanges
together (shown in green in the graph) also naturally shot up in
close tandem with the rise in Coinbase’s reserve. This increase in
the spot reserve suggests that investors may have been planning to
do a selloff yesterday. And indeed, as it turns out, in the past
day, Bitcoin has taken a 4% hit, with its price losing the $22,000
level. This might confirm that the deposits were done for dumping
purposes after all. The exchange reserve for all derivative
exchanges has also seen a slight rise in recent days, but the
increase is likely not significant enough to cause any noticeable
effects on the market. Related Reading: Dogecoin Down 6%, Slips
Below Polygon On Market Cap List In the top chart (the one with the
data for the BTC price), there are also all exchange reserves
shown, which is the version of the indicator that combines the
reserves of all kinds of exchanges. While this indicator has
obviously trended up in the last two days (due to the spot
deposits), the metric has overall still gone down in the last two
weeks, which suggests that some net Bitcoin accumulation has taken
place in the market. If these withdrawals were really a sign of
buying, then the coin could still see a bullish effect in the long
term. BTC Price At the time of writing, Bitcoin is trading around
$21,800, down 7% in the last week. Looks like BTC has plunged today
| Source: BTCUSD on TradingView Featured image from Kanchanara on
Unsplash.com, charts from TradingView.com, CryptoQuant.com
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