Bitcoin Price Movement Defies Conventional Wisdom as Exchange Balances Hit Five-Year Low

Bitcoin Is Flying Off Exchanges, So Why Isn’t Price Going Up?

In a recent tweet, Swan reported that Bitcoin exchange balances have hit a five-year low. This phenomenon would typically signal an increase in price, as self-custody and accumulation are usually accompanied by rising prices. However, the current market scenario seems to defy this logic, with Bitcoin’s spot price stuck in a tight range between $93,000 and just above $95,000.

As reported by Swan, it appears that a large portion of these Bitcoins is not going into cold storage but rather being transferred into institutional custody, such as ETFs, fund administrators, and trading infrastructure. This might seem counterintuitive to some, as one would expect the coin flow towards self-custody, which often indicates long-term conviction.

Bitcoin has been in a consolidation phase since April’s dip below $75,000, but it is still up over 12% for the month. Some analysts have speculated that Bitcoin is trying to finalize its first price discovery correction and transition into a second uptrend, with the current range-bound movement serving as a precursor to this shift.

Bitcoin has been steadily climbing since April’s low, currently trading around $94,800 after briefly dipping below $93,400 during the Asian trading session. While some might have expected more dramatic gains in light of these exchange balances, it appears that Bitcoin is instead focusing on solidifying its position and preparing for a potentially violent price movement.

It’s clear that there is something peculiar at play here, as even this 12% gain over the past month does not align with traditional market expectations. It seems that institutional investors are driving the demand for the asset, which would not typically result in this type of range-bound trading activity.

In light of these observations, it appears that Bitcoin’s price movement is defying conventional wisdom. Instead of moving linearly upward, it’s possible that we’re witnessing a more violent and irreversible price action event on the horizon.

Source: https://cryptopotato.com/bitcoin-is-flying-off-exchanges-so-why-isnt-price-going-up/