The cryptocurrency market was recently hit with a wave of panic as the SEC accused California-based cryptocurrency exchange, Kraken, of operating an unregistered crypto staking scheme. As a result, the price of Bitcoin plummeted by 5%, temporarily reaching the bottom of the $21,000 level after reaching a peak of $24,000 just a few weeks prior. Despite this, recent market data shows a significant upward trend in the price of Bitcoin as it reclaims the $21,800 mark in the past hour.
Is Bitcoin Showing Bullish Signals?
According to on-chain data, Bitcoin is currently facing the 50MA (moving average) and its monthly chart is offering a buying opportunity with several positive indications. An analyst from CryptoQuant recently noted an increase in the reserves held by cryptocurrency exchanges. This “exchange reserve” measures the total amount of Bitcoin stored in the wallets of centralized exchanges and can be used as a gauge for investor sentiment.
An increase in the exchange reserve value indicates that investors are adding their coins to the exchange for trading purposes, which could be negative for the cryptocurrency price if the platform in question is a spot exchange. On the other hand, a decline in the exchange reserve could mean that holders are withdrawing their coins from the exchange, potentially transferring them to a cold wallet for safe storage. This trend could be seen as bullish for the price in the long run as it reduces the amount of selling pressure on the asset.
Bitcoin’s Price Recovery
Although the exchange reserve has been on an upward trajectory over the past two days due to spot deposits, the overall trend has been declining over the last two weeks, indicating a net accumulation of Bitcoin. If these withdrawals were indeed a sign of buying, then the coin may still see a bullish influence in the long term. Additionally, CoinGape’s crypto market tracker suggests a neutral position for BTC’s technical analysis (TA) indicators, with a “buy” at 8 and “sell” at 10. As of now, the price of Bitcoin is trading at $21,812, representing a slight increase of 0.14% in the past hour and a drop of 6.40% in the past seven days.
In conclusion, despite the recent panic in the cryptocurrency market, the overall sentiment appears to be cautiously optimistic about Bitcoin’s future. The upward trend in exchange reserves and declining trend in withdrawals could indicate a bullish signal, with investors accumulating their coins and potentially reducing selling pressure. However, it is important to keep in mind that technical analysis is still recommending a neutral position, suggesting that the market is uncertain about the direction of the price. Nevertheless, the current price of Bitcoin at $21,812 shows a potential recovery from the recent dip.
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