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Bitcoin Exchange Deposits Drop to 2016 Lows – Here’s What It Means
Despite a recent surge in sell pressure, which has kept the asset below $100K, the long-term outlook for Bitcoin (BTC) remains positive. This is according to CryptoQuant analyst Axel Adler, who notes that deposits on exchanges have dropped to levels not seen since 2016.
According to the data, BTC daily deposits peaked at over 125K coins in early 2024, but this number has declined sharply, now below 45K BTC, matching the lows of six years ago. It’s worth noting that in the past, such low deposit numbers have preceded a major rally for the cryptocurrency.
Adler attributes the current decrease to users preferring to keep their BTC in personal wallets rather than preparing to sell. This development is seen as a positive signal by the analyst.
Furthermore, the CryptoQuant data reveals that more Bitcoin is being moved from exchanges, further supporting the notion that investors are holding onto their coins rather than rushing to sell. The netflow-to-reserve ratio has turned negative, indicating that on average, more Bitcoin leaves exchanges than enters them. This metric typically signals a bearish signal.
However, despite this short-term weakening in demand indicated by the daily RSI slipping below 50, the long-term outlook for Bitcoin remains strong. If this pressure continues to mount, it’s possible that we could see a drop to $90K or even $85K. However, if support is maintained above the dynamic support of the 50-day EMA, there may be an opportunity to retest the previous highs around $100K or even break out to new levels.
It remains to be seen how this situation will unfold, but for now, it appears that investors are taking a cautious approach and choosing to hold onto their Bitcoin rather than sell.
Source: ambcrypto.com
