Bitcoin balances on exchanges are at their lowest since the beginning of 2023. This indicates a declining liquidity trend on cryptocurrency exchanges. Bitcoin exchange balances have decreased throughout 2024. The total BTC now stands at 2.3 million, down 116,000 BTC in one month. Since the beginning of the year, exchange balances have decreased by 315,775 BTC, approximately 12.8%.
Decrease in Exchange Balances
Among the largest exchanges, Coinbase holds 783,104 BTC but has decreased by 38,311 BTC in the past 30 days and by 281,840 BTC since January 1, 2024. Binance has 578,991 BTC, down 29,369 BTC in the last month.
Other exchanges like Bitmex and OKX have experienced contrasting trends, with OKX seeing an increase of 33,834 BTC since the beginning of the year, indicating different trading behaviors across platforms.
Historically, when exchange balances decrease, it indicates bullish market sentiment. This means lower selling pressure. This trend aligns with Bitcoin's price increase, above $95,000.
Price and Sentiment of Bitcoin
The increase in Bitcoin price is accompanied by high investor sentiment, as reflected in the Fear & Greed Index. Bitcoin's price often rises during periods of heightened greed, as seen in 2020 and 2021. This index is currently at a high greed level, consistent with Bitcoin's price uptrend.
These changes illustrate the role of investor sentiment in creating price volatility. When Bitcoin's exchange balances decrease and price trends upward, the market may become more volatile.
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