Bitcoin reserves on exchanges plunge to all-time low, fundamentals remain strong

Despite Bitcoin’s price correction 287 days after its most recent halving event, on-chain metrics suggest fundamentals remain strong.

Analyst TheLordofEntry has shared insights into key indicators that show a rise in continued demand and strong holder behavior. This strength is despite the recent short-term volatility.

Bitcoin exchange reserves hit all-time low

One of the most important fundamentals is the drop in Bitcoin (BTC) reserves on cryptocurrency exchanges to an all-time low.

This trend indicates that investors are increasingly choosing to hold their BTC rather than keep it on exchanges for potential selling. The decline in exchange reserves is often interpreted as a bullish signal. This is also a potential signal of a reduction in immediate selling pressure.

The analyst highlighted that active addresses and transaction volume on the Bitcoin network remain high. This denotes sustained on-chain activity despite the price correction. 

TheLordofEntry also highlighted major changes in the derivatives market. As per the data shared by the analyst, derivative market positions have decreased substantially, indicating a reduction in leverage among traders.  

Long term holders continue scooping up Bitcoin

Investor behavior pinpoints that long-term holders are continuing to accumulate BTC. In contrast, short-term holders are exhibiting signs of selling.  

The analyst suggests that long-term trends might remain positive, based on the accumulation patterns of seasoned investors and the declining exchange reserves.

Bitcoin has struggled to maintain its positive trajectory ever since it hit a new all-time high of $73,700 in March. Even though BTC managed to climb back to the $65,000 level, several market conditions dragged the price below the $60,000 level.

BTC is now hovering in the $62,600 level at press time as the global crypto market cap is down by over 1.6% in the last 24 hours.