Crypto News– Despite notable moves by influential players such as Microstrategy bolstering their positions through substantial acquisitions, Bitcoin (BTC) has struggled to reclaim the $28,000 mark throughout September. The decline in BTC supply residing on cryptocurrency exchanges has prompted on-chain analysts to assess its potential implications on Bitcoin’s price dynamics in October 2023 and the foreseeable future.
Bitcoin Exchange Reserves Approach Annual Lows: Potential Implications for October Price Trends
In recent weeks, Bitcoin holders have increasingly chosen to shift their assets from exchange wallets into secure, long-term storage solutions. Curiously, this trend has not triggered the anticipated BTC price surge. As it stands, Bitcoin’s value has descended by 13% from its 2023 second-half peak of $31,500, a milestone reached in July. Nevertheless, amidst this price decline, significant macro events such as the advancing approval of Bitcoin Spot ETFs have galvanized institutional investors into accumulating Bitcoin.
Distinguished for their preference for safer self-custodial storage methods, this recent wave of accumulation by prominent institutional players has resulted in a substantial reduction in the available Bitcoin supply on exchanges.
As illustrated below, a mere 5.83% of the total circulating Bitcoin is presently held in wallets hosted by cryptocurrency exchanges, marking the lowest figure since August 24.
The Bearish Sentiment’s Impact: Trading Activity Witnesses a Substantial Decrease
While Bitcoin’s large-scale investors, often referred to as whales, have been accumulating their holdings, the prevailing bearish sentiment has exerted a negative influence on trading activity.
As illustrated below, Bitcoin’s daily trading volume stood at $29.4 billion on August 29. However, it has since experienced a series of successive declines, reaching a mere $12.7 billion as of September 28. This substantial decrease translates to a 57% contraction in trading activity. Typically, during bearish market phases, spot trading volumes tend to dwindle as disillusioned holders abstain from engaging in transactions. Consequently, the decline in BTC spot volumes signifies a waning level of investor enthusiasm.
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