2 factors are combining to drive bitcoin to new heights
Historically, moves like the ones we are seeing drive cryptocurrencies to new highs.
Bitcoin reserves on exchanges have decreased significantly.
USDT shipments to major exchanges have skyrocketed.
Currently, moves are being set up that could drive the price of bitcoin (BTC) to higher levels.
Two key factors are converging and project a possible increase in the price of bitcoin, which could also drag the entire cryptocurrency market into an upward trend. The first factor is related to BTC reserves on exchanges. These reserves have been decreasing noticeably, a trend that has historically preceded price rallies.
The following graph shows the decrease in reserves of the first digital currency on exchanges. The reason is that a smaller amount of BTC available on exchange platforms reflects reduced selling pressure, as investors transfer their funds to wallets, decreasing the supply in circulation.
According to an analysis by trader Tarekonchain, shared by on-chain data provider CryptoQuant, this phenomenon is an indicator that could signal an upcoming rise in the price of bitcoin.
Stablecoins show a bullish path for bitcoin
The second factor that is playing a crucial role is the increase in stablecoin reserves, mainly USDT, on exchanges.
This increase suggests that investors are preparing to buy assets like bitcoin, as stablecoins represent capital ready to deploy. The following graph shows the increase in this type of cryptoassets on exchanges. When their presence grows on exchanges, it indicates a latent buying interest, which generally translates into a possible increase in demand for bitcoin.
