Bitcoin exchange balances have reached a five-year low as a result of substantial outflows from major crypto exchanges like Binance and Coinbase. This decrease in supply on the exchanges could potentially lead to a high demand for Bitcoin, causing its price to surge towards $70,000.
The recent data shows that the total balance of Bitcoin on exchanges is now below 2.3 million BTC, a level that hasn’t been seen since March 2018. The significant drop in balances is primarily due to the large outflows from exchanges like Binance and Coinbase. This shift in investor sentiment indicates a preference for long-term holding strategies. It also suggests a bullish phase for Bitcoin, with the possibility of the cryptocurrency reaching $70,000.
Over the past year, Binance, the largest crypto exchange in terms of market volume, has experienced significant withdrawals. Similarly, Coinbase has seen substantial outflows, with a notable 16,000 BTC being moved in a single day. These large outflows indicate that whales, or large-scale investors, are moving their Bitcoin to private wallets. This suggests that these investors are anticipating future price surges and are less likely to sell their holdings on exchanges.
The movement of Bitcoin from exchanges to private wallets will result in a scarcity of BTC tokens in circulation. When the supply on exchanges decreases, it can create upward pressure on prices if demand increases or remains constant. The principle of supply and demand is a fundamental aspect of market economics, and in this case, a low supply and high demand for Bitcoin could lead to an increase in its price.
As of now, Bitcoin is trading at $69,800.00, representing a 2.46% surge and a 105% surge in trading volume in the past 24 hours. The current market sentiment is leaning towards a bullish outlook for Bitcoin.
Technical indicators are suggesting a mixed but cautiously optimistic outlook. The $68,000 mark is a crucial point in determining Bitcoin’s short-term price. Immediate resistance levels are identified at $70,600 and $73,000, while support levels are at $66,650, $65,950, and $65,150.
The Relative Strength Index (RSI) is at 46.62, indicating a neutral trend. Additionally, the 50-day Exponential Moving Average (EMA) is currently at $68,000, aligning with the pivot point. The presence of a double bottom pattern near the $66,650 mark suggests the potential for a bullish leap, which could further drive Bitcoin’s price upward.
Investors are advised to closely monitor the $68,000 pivotal mark. A breakthrough above this level could signal a bullish trend for Bitcoin, pushing the next resistance level at $69,000. However, if Bitcoin fails to surpass this mark, it may struggle to surpass the $67,800 level due to bearish indicators such as the 50-day EMA and the RSI.
The chances of a bullish trend are increasing as major exchanges experience significant outflows and Bitcoin’s balance on exchanges reaches levels not seen since 2018. Whales moving their Bitcoin to private wallets reduces the supply and increases the possibility of price surges. While technical indicators provide a mixed but cautious outlook, the overall market sentiment leans towards a bullish outlook, with prices potentially surging to $72,000.