Bitcoin Reserves at 5-Year Low: What Does This Mean for BTC?
Bitcoin (BTC) has remained in the spotlight this week, showing continued bullish momentum.
The cryptocurrency market has seen significant shifts, with BTC recently breaking out of a bullish flag pattern, sparking optimism for further price increases.
From plummeting reserves to rising profits for holders, here’s why the market is buzzing with optimism.
Bitcoin Reserves Are Declining
According to data from CryptoQuant, BTC reserves on exchanges have fallen to their lowest levels since 2017. Historically, declining exchange reserves have been an indicator of increasing buying pressure.
In Bitcoin’s case, given the current price rally, the market sentiment suggests the possibility of continued upward momentum as more capital flows into BTC.
Lower reserves mean less Bitcoin is available for immediate liquidation, which could fuel further price increases in the coming days.
Net Unrealized Profit Surges
Over the past 24 hours, Bitcoin’s net unrealized profit has skyrocketed, signaling that the majority of BTC holders are sitting on unrealized gains.
This reflects growing confidence in the market, as more holders are choosing to keep their profits, further reducing selling pressure. This snowball effect is boosting the bullish sentiment around Bitcoin.
94% of Bitcoin Holders Are in Profit
Analysis from IntoTheBlock shows that as of the time of writing, 94% of Bitcoin holders are in profit. This creates a bullish foundation for the market.
When holders are already in profit, they are less likely to sell during short-term fluctuations, further tightening Bitcoin’s supply.
With the sharp rise in unrealized profit, coupled with a significant portion of holders already in profit at current prices, Bitcoin’s bullish rally is more likely to persist in the long term.
Additionally, Bitcoin recently broke out of a bullish flag pattern, a technical indicator that has historically suggested further price increases.
The fact that reserves continue to fall, while unrealized profit remains strong, only strengthens the case for an extended BTC rally.