Bitcoin Exchange Reserves Hit Record Low and Set Stage for Market Volatility

Bitcoin exchange reserves have hit a historic low according to the recent data by CryptoQuant. As per the recent report, the exchange reserves have dropped below 2.6 million BTC for the very first time. This major market development came as Bitcoin reached an all-time high of over $111,500 in late May, which underscores the rising demand and the scarce supply of the premier cryptocurrency in the market.

The declining reserve is seen as a potential sign of significant price movement by market analysts. Usually, lower reserves on exchanges suggest reduced selling pressure, especially when accompanied by rising prices. This combination often results in price surges because there are fewer Bitcoins available for sale in the market.

Institutional Interest Increased in Bitcoin

The key factor behind the current trend is institutional interest in Bitcoin. Many big companies have increased their crypto portfolios this year. Strategy, one of the leading institutional Bitcoin holders, added 7,390 BTC to its portfolio in May. This new addition brought its total Bitcoin holding to 575,230, which is approximately 2.75% of the total supply for the premier cryptocurrency. Corporations such as Japan’s Metaplanet and Gamestop have also expanded their portfolios.

Spot Bitcoin ETFs have also added momentum to this buying spree, registering an incredible $5.23 billion in inflows in May. Institutions and companies aside, even governments are entering the race. Pakistan and the United Arab Emirates have increased their Bitcoin reserves, whereas the U.S. Congress is currently debating the creation of a national Bitcoin reserve.

While the bullish sentiment is still high, the technical indicators are painting a mixed picture. At the moment, Bitcoin is trading above both its 200-day Exponential Moving Average (EMA) and Simple Moving Average (SMA), which signals long-term strength. However, the Relative Strength Index (RSI) is currently at 52, indicating a neutral sentiment with potential for short-term pullbacks.

As we move forward with this positive mindset, it is yet to be seen how the market will react to this news. While Bitcoin exchange reserves hit a record low, the chances of the market moving towards bullish sentiment are high!