BTC Quantity rapidly departing from digital wallets, yet value remains steady - Puzzling Mystery Unveiled
Bitcoin reserves on exchanges have plummeted to a five-year low, as reported by Swan Financial Services on May 1st. They exclaimed, "Strategy is amassing 15,000 more BTC, ETFs are piling it up, and sovereign wealth is eyeing it warily," but still asked, "Why isn't the price skyrocketing?"
Bitcoin encountered resistance at the $95,000 level and has been in a holding pattern there for the last week.
The Upstream Shift
Swan analysts pointed out that some BTC is making its way to cold storage, which is a bullish sign as it shows long-term commitment. However, a substantial amount of BTC is moving towards institutional custody, such as ETFs, fund managers, and trading infrastructure. They commented, "The coins haven't vanished; they've just moved upstream."
Not all of this Bitcoin is inactive; some of it is held passively, while some is used in structured products, yield platforms, or as collateral. As a result, prices are not edging up immediately.
"Bitcoin is, after all, a market, and sellers never really disappear."
Traders searching for short-term gains, long-term holders looking to trim their profits, and speculators who never really understood what they bought make up some of the sellers.
In light of Strategy's recent accumulation of BTC, they remarked, "Miners are producing around 13,500 BTC per month, but Strategy, fueled by cheap debt and relentless capital, has outpaced production for months, creating a sort of 'synthetic halving.'"
They're not merely stacking; they're "compressing Bitcoin's supply curve from the outside." The analysts concluded, "Yes, supply is drying up. But a move in price happens when demand breaks the balance. With infinite fiat chasing a genuinely scarce asset, Bitcoin's next move won't be gradual. It'll be intense. And likely irreversible."
Analyst "Rekt Capital" offered some thoughts on Bitcoin's price discovery roadmap, asserting that the asset is attempting to finalize its first price correction to transition into its second price surge.
Bitcoin Price Projection
Bitcoin plummeted to an intraday low below $93,400 before rebounding to $94,800 during the Thursday morning Asian trading session. The asset remains trapped within a tight range between $93,000 and slightly over $95,000. Despite this, it has climbed by more than 12% over the past month and has made a strong comeback from an early April drop to $75,000.
"Bitcoin is testing key resistance at $93K-$95K, breaking its downtrend and forming a higher high," reported Glassnode, adding, "On-chain and technical signals indicate a market at a turning point."
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- The Bitcoin reserves on exchanges are dwindling, with some BTC moving towards cold storage, indicating a long-term commitment.
- Simultaneously, a significant portion of Bitcoin is being held by institutional investors such as ETFs, fund managers, and trading infrastructure.
- The coins aren't disappearing; they're simply moving upstream to these institutional custodians.
- Some of the Bitcoin is held passively, while some is used in structured products, yield platforms, or as collateral, preventing an immediate increase in prices.
- Strategy, a notable player, has been accumulating BTC at a pace that outmatches the production of new Bitcoins, creating a 'synthetic halving'.
- Analysts foresee an intense and likely irreversible move in the Bitcoin price when demand outstrips this relentlessly compressed supply.
- Rekt Capital posits that Bitcoin is on the verge of its first price correction to pave the way for a second surge in its price discovery roadmap.
