Bitcoin deposited in exchange wallets has now dropped to 2.05 million BTC, its lowest since January 2018. With the overall crypto market sentiment trending neutral, here’s how Bitcoin price could react in the coming days. 

Bitcoin’s (BTC) price has struggled since losing the $30,000 support in late July 2023, before a flash crash on Aug 17 compounded the bearish headwinds. Rather than fold, on-chain data reveals BTC holders have been moving their assets off exchanges, presumably for long-term self-custody. 

Bitcoin Investors Are Holding For Future Gains 

Bitcoin deposited in Exchange wallets has now dropped to a 5-year low, according to on-chain data compiled by Cryptoquant. The chart below depicts that Bitcoin Exchange Reserves have dropped to 2.05 million BTC as of August 24.

Zooming out, the data shows that BTC Exchange reserves have not dropped this low since January 2018. 

Exchange Reserves track real-time changes in investors’ total BTC balances in recognized crypto exchange wallets. Notably, Bitcoin Exchange reserves dropping to 2.05 million coins means that investors have now withdrawn 480,000 BTC in August 2023 alone.   

When Exchange Reserves decline during a market downturn, it signals that investors are looking to HODL for future gains rather than bail out. If it persists, Bitcoin price could react with a significant price surge when macro drivers and overall global crypto market sentiment flip bullish again.

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Author: Ibrahim Ajibade

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