With Bitcoin moving to breach the resistance at the $40,000 mark, institutional investors and individuals are looking to pack their savings into an inflation-proof and stateless asset. More investors are moving their precious bitcoin from exchanges and into cold storage.
Santiment, a crypto on-chain data provider, highlighted that the amount of cryptocurrencies stored in centralized exchanges has slipped to its lowest level since 2018. It said the supply of bitcoin on exchanges has declined by 14% from two months ago. This shows that the prevailing macroeconomic factors and soaring inflation are prompting more investors to hold onto their digital assets.
Low bitcoin reserves on exchanges are bullish. It indicates that market participants don’t want to sell off their holdings at current prices. Another factor is that BTC has managed to hold onto its upward trend despite the worsening Ukrainian crisis and the Federal Reserve’s recent interest rate hike.
Increasing volatility has been pulling BTC’s price down but it has managed to make it across the $40,000 mark to its recent high of $41,677 as per CoinMarketCap. But owing to its volatility, the price could move further up or fall. Analysis from Decentrader, a trading suite, highlights that the world’s most popular crypto is ready to make a sustained move. This is likely to end Bitcoin’s long consolidation phase.
However, it predicts that BTC could dip to the lows of the $37,500 mark in the weekend before making a “big move” next week. Some analysts see a higher move for bitcoin in the near to mid-term. It is likely to breach the $43,000 zone.