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The exchange offer bottoms at 1.7 million BTC ahead of the ETF’s second wave
THE Bitcoin (BTC) the foreign exchange reserve reached an all-time low, plunging to almost 1.70 million BTC. This significant decrease has sparked discussions about the potential for higher prices. The surge is expected to be driven by a combination of demand shocks and inelastic supply dynamics.
Bitcoin exchange reserve at historic low
Thomas Fahrer, co-founder of Apollo, highlighted the current market sentiment in a post on X. He said: “Bitcoin exchange reserves are at an all-time low. Just in time for a second wave of ETF flows.” Furthermore, he believes that “inelastic supply + demand shocks” will lead to a parabolic run in the price of Bitcoin.
His statement highlights the optimistic outlook among investors who see this low reserve level as a precursor to a substantial increase in prices. Currently, according to the data, the Bitcoin exchange balance stands at 1.72 million BTC Coinglass data.
Foreign exchange reserves are a key parameter to understand market dynamics. They represent the cumulative result of currency inflows and outflows. Furthermore, a decreasing trend in foreign exchange reserves suggests a reduction in selling pressure, as fewer coins are available for sale on exchanges.
Conversely, an uptrend typically indicates that more coins are entering the market, increasing selling pressure. The current decline in Bitcoin The foreign exchange reserve implies that market participants are withdrawing their currencies from exchanges. The withdrawal is likely for a long-term holding rather than an immediate sale.
Therefore, this behavior indicates bullish sentiment, where investors expect higher future prices and are therefore reluctant to sell at current levels. Additionally, Thomas Fahrer provided insights into institutional investment trends, mentioning Horizon Kinetic Asset Management’s substantial allocation to Bitcoin. He revealed: “Forget the 2-3% allocation. Horizon Kinetic Asset Management has $913 million of #Bitcoin invested in IBIT + GBTC, representing 14% of their $6.5 billion AUM. This is investing.”
The second wave of Bitcoin ETFs is imminent and some are expecting a net inflow of $1 billion for the current week. Furthermore, institutional strengthening is expected, which could boost investor confidence and push the BTC price higher. Additionally, ETF inflows will take BTC out of the market, accelerating the supply crunch.
Read also: Bitcoin price will reach new highs, but there is one condition
Will BTC price regain momentum?
Bitcoin has already shown signs of reversal after rebounding above $67,000 after losing momentum earlier. However, Bitcoin’s 24-hour price change is still in the red. At the time of reporting, l BTC price on Monday, May 20, it was down 0.54% at $67,030.16. The older cryptocurrency boasted a market capitalization of $1.31 trillion.
In contrast, the 24-hour trading volume for BTC increased by 38.91% to $22.60 billion. On the other hand, Bitcoin longs liquidated $16.71 million, which could push the price of BTC lower. Nonetheless, the shorts generated strong competition with settlements of more than $10 million.
Crypto analyst Ali Martinez also weighed in on the situation, noting a critical support level for Bitcoin. In a post on This observation suggests that if Bitcoin maintains its price above this support level, the market could see further upside momentum.
Read also: Bitcoin Whale Buys 1,590 BTC Amid Price Flow, What’s Next?