BTC Exchange Reserve Plunges to 5-Year Levels as Investor Cohorts Position for Bull Market: Bitfinex

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Many market indicators show that long-term holders and a large part of the short-term holder cohort are currently in a HODL phase.

The latest edition of the weekly market report from cryptocurrency exchange Bitfinex revealed that bitcoin reserves on centralized exchanges have plunged further to levels last seen in early January 2018., only 2.03 million BTC currently sits on exchanges. Bitfinex noticed a correlation between the slump in exchange reserves and increased crypto prices, suggesting that the market may be in for a bull run.

As crypto prices increased, exchange reserves continued to decline, implying that the scarcity of BTC on trading platforms may be the force behind the price movement. However, the BTC price dip in November 2021 and the continued decrease in exchange reserves challenged the relationship, showing that investors also tend to hold less BTC on exchanges during bear markets.

Nevertheless, many market indicators show that long-term holders and a large part of the short-term investor cohort are currently in a HODL phase and are positioned to hold their assets for longer periods.The 12-18-month supply holders are currently in a position to make a profit on some of their holdings, but long-term and short-term holder supply hasinactive.

Notably, Bitfinex analysts found that a green October has succeeded the three occasions where BTC ended September on a positive note. October has also been a month where BTC“Crucially, we’ve closed September in the green, a rare occurrence. Historically, a positive September ushers in a bullish October, and the volatility as well as the futures market metrics all point towards increased volatility and some upside, at least on the higher time frames,” said the analysts.

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