Bitcoin price stuck in a range as balances on exchanges plunge

Although the amount held on exchanges continued to decline, the Bitcoin price remained in the consolidation phase.

Bitcoin (BTC) was trading at $62,540 on October 8, just below this week’s high of $64,500. It remains in a correction after falling 15% from this year’s high.

Bitcoin still has some potential catalysts that could push its price higher in the coming months. Data from CoinGlass shows that Bitcoin reserves on exchanges continue to decline and have reached 2.34 million, their lowest level since the beginning of the year.

Bitcoin balances on exchanges | Source: CoinGlass

It is estimated that Bitcoins worth over $31 billion have been removed from exchanges since February. While most of these funds were moved to personal custody wallets, others were transferred to exchange-traded funds.

Flows from exchanges to wallets are usually a sign that most investors are bullish. Some leading companies such as MicroStrategy, Marathon Digital, Block and Tesla are among the most bullish in the industry.

MicroStrategy has accumulated 252,000 worth of Bitcoin, while Marathon has 26,842 coins. Tesla and Block, formerly known as Square, own 9,720 and 8,211 coins, respectively.

Additional data from Nansen shows that smart money holdings of stablecoins have fallen to their lowest level in recent years.

This figure rose to 38.5% in May 2022, when Terra crashed, and rose to 35.7% after FTX crashed in November of the same year. The fact that it has been in a strong downtrend since then suggests that the smart money is mostly bullish on cryptocurrencies.

Stablecoin assets with smart money | Source: Nansen Bitcoin finds support on TradingView’s 200 EMA Bitcoin price chart

On the daily chart, Bitcoin remains stuck in the descending black channel connecting the highest and lowest swings since March. This channel can be viewed as a falling expanding wedge, which is a popular bullish sign.

It also found support at the 200-day Exponential Moving Average, which is a positive sign. However, Bitcoin has formed a small evening star candlestick pattern characterized by a small red body and a long upper shadow.

Therefore, Bitcoin will need to move above $64,500, which is the upper side of the shadow pattern. Going forward, the bulls will need to break above the descending trend line and then the all-time high at $73,800 to resume the uptrend.

The alternative scenario is for Bitcoin to break below the 200-day EMA at $60,000. If this happens, there will be an increased chance of a drop to the bottom of the wedge towards $52,000.