Bitcoin had a brief price decline at the end of the trading week, briefly falling below $87,000 after hitting a new all-time high of nearly $94,000 on Wednesday.

However, the worst may be over as the asset has recovered most of its losses and is now trading above $91,000. At the same time, on-chain factors have emerged suggesting that its upside momentum still has plenty of room to run and it could eventually challenge the coveted $100,000 level.

BTC on exchanges down

One of the metrics used to determine the immediate selling pressure on a given cryptocurrency is its ability to sell quickly, which is evident in the reserves on exchanges. Basically, the less there are on trading platforms, the less immediate selling pressure there is on the underlying asset.

In this scenario, investors are withdrawing their money, often into cold storage devices, in preparation for a continuation of the current trend.

CryptoQuant data shows that BTC reserves on exchanges have continued to decline recently, especially since Donald Trump won the 24th US presidential election last week. In fact, bitcoin reserves have dropped to a six-year low of below 2.6 million.

“This volatility reduces the supply available for immediate sale, creating buying pressure in a tight supply environment. As a result, the market could see a bullish trend in Bitcoin, especially if demand remains stable or grows,” their analysis said.

The report also pointed out that the withdrawals from these exchanges reinforce investors' view that bitcoin serves as a “store of value amid global economic uncertainty and high inflation.”

Removing BTC from exchanges could lead to a “more volatile but more resilient” BTC market, with less selling pressure and “increasing dominance by long-term holders, which could open up space for new price peaks.”

Stablecoins are on the rise

Market liquidity has improved in recent weeks, again especially after Trump’s victory, which is another factor that could further suggest bullishness for the crypto market. After all, stablecoins make it easy and simple for investors to enter the market and allocate funds to bitcoin and altcoins.

CryptoQuant’s dashboard shows that more than $3 billion in USDT alone has been inflowed into cryptocurrency exchanges since the election, a three-year high. The chart below illustrates how the surge in stablecoins and exchanges coincided with BTC’s price surge.