Bitcoin (BTC) dipped below $107,000 on Tuesday, continuing a mild pullback from the previous day’s highs. Despite the short-term price correction, underlying market fundamentals remain strong, supported by robust institutional demand and a significant decline in exchange reserves — now at their lowest level since 2018. With fewer coins available for immediate sale, long-term bullish momentum may be quietly building.
Bitcoin Exchange Reserves Drop to 2.44 Million BTC
According to data from CryptoQuant, Bitcoin reserves across all major centralized exchanges have fallen to just 2.44 million BTC as of Monday — the lowest level recorded since 2018. This steady decline, ongoing since mid-July 2024, signals that investors are moving their holdings off exchanges and into cold storage or long-term wallets.
👉 Discover how low exchange reserves can fuel the next major price surge.
A shrinking exchange supply typically reduces selling pressure and enhances scarcity — two key drivers of upward price momentum. When fewer coins are available for trading on exchanges, even moderate buying demand can exert disproportionate upward pressure on prices. Historically, such conditions have preceded or accompanied strong bull market phases.
This structural shift reflects growing confidence among long-term holders and institutions who are less reactive to short-term volatility and more focused on Bitcoin’s macroeconomic value proposition.
Corporate Demand Remains Strong
Even as prices cool slightly, corporate adoption continues to accelerate. On Monday, Strategy announced the acquisition of an additional 4,980 BTC, bringing its total holdings to 597,325 BTC. This move underscores the company’s deepening commitment to Bitcoin as a core treasury asset.
In parallel, Japan-based investment firm Metaplanet increased its BTC reserves by 1,005 units, raising its total to 13,350 BTC. Similarly, Blockchain Group confirmed the purchase of 60 BTC, bringing its cumulative holdings to 1,788 BTC.
These strategic acquisitions highlight a broader trend: companies are treating Bitcoin not as a speculative asset but as a long-term store of value — akin to digital gold.
Institutional inflows into spot Bitcoin ETFs also remain resilient. Data from SoSoValue shows that on Monday alone, spot BTC ETFs saw net inflows of $102.14 million. This marks the 15th consecutive day of positive flows since June 9, reinforcing institutional confidence in Bitcoin’s future trajectory.
Sustained ETF demand could serve as a powerful catalyst for new all-time highs — especially if macroeconomic conditions improve or global liquidity expands in the coming months.
Q&A: Understanding the Current Market Dynamics
Q: Why are declining exchange reserves bullish for Bitcoin?
A: Lower exchange reserves mean fewer coins are readily available for sale. This reduces selling pressure and increases scarcity, which can drive prices higher when demand remains steady or grows.
Q: Are corporations still buying Bitcoin despite price dips?
A: Yes. Companies like Strategy, Metaplanet, and Blockchain Group have recently added BTC to their balance sheets, signaling strong conviction in its long-term value.
Q: What do ETF inflows indicate about market sentiment?
A: Consistent net inflows into spot Bitcoin ETFs reflect sustained institutional interest and suggest that professional investors continue to accumulate BTC at scale.
Q: Is Bitcoin likely to retest its all-time high soon?
A: While short-term consolidation is possible, structural support remains intact. A breakout above $112,000 would require strong catalysts — such as macro easing or accelerated ETF inflows.
Q: What technical levels should traders watch?
A: Key support sits at the 50-day EMA ($104,219). A break below could trigger further downside toward $100,000. Conversely, reclaiming $108,000 may pave the way toward $112,000.
Q: How does seasonality affect Bitcoin’s Q3 performance?
A: Historically, Q3 has been Bitcoin’s weakest quarter, averaging just 6% returns. Lower volatility and range-bound movement are common during this period.
Bitfinex Analysis: Bitcoin May Enter Range-Bound Phase in Q3
In its latest report, Bitfinex Alpha highlighted seasonal trends suggesting that Q3 often brings reduced volatility and directional momentum for Bitcoin. On average, this quarter delivers the lowest historical returns — around 6% — with price action tending to consolidate within a trading range.
“Currently, Bitcoin is in a waiting game,” noted the analysts.
They added that structural support remains intact as long as key levels — $94,000 and $99,000 — hold. There is no immediate risk of a major breakdown. However, reclaiming the all-time high will likely require a strong external catalyst.
Potential triggers include:
- Easing macroeconomic conditions
- Accelerated ETF inflows
- Expansion in global liquidity
👉 Learn how macro trends and ETF flows could spark the next Bitcoin rally.
Technical Outlook: Slight Pullback Amid Neutral Momentum
Bitcoin surged 7.32% last week, closing above $108,000. However, momentum softened slightly on Monday with a 1.12% decline. By Tuesday, prices continued to drift lower, trading below $107,000.
On the daily chart, the Relative Strength Index (RSI) sits at 53 — slightly above neutral but still within a consolidation range. For bullish momentum to resume, RSI needs to climb past 60. Meanwhile, the Moving Average Convergence Divergence (MACD) generated a bullish crossover earlier in the week, signaling potential upside ahead.
The 50-day Exponential Moving Average (EMA) at $104,219 serves as critical support. If this level holds, Bitcoin could resume its climb toward the May 22 all-time high of $111,980.
Conversely, a close below $104,219 may open the door to further downside pressure, potentially testing the psychological $100,000 level.
Derivatives data also hints at short-term caution. According to Coinglass, the long-to-short ratio dropped below 1 on Tuesday to 0.90 — its lowest level in over a month. This suggests increasing bearish sentiment among leveraged traders, which could amplify volatility if a sharp reversal occurs.
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Note: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult with a qualified financial advisor before making investment decisions. Cryptocurrency investments are volatile and high-risk; you may lose your entire capital.