Bitcoin Price Prediction: Exchange Balances Hit Five-Year Low – Bullish Outlook for BTC?

June 3, 2024 · Crypto News, TGbot · Source:NewCoinSpot

Declining Exchange Balances Signal Long-Term Holding

The balance of Bitcoin on exchanges has plummeted to its lowest level since March 2018, dipping below 2.3 million BTC. This significant decrease is largely driven by substantial outflows from major exchanges such as Binance and Coinbase, indicating a market shift towards a long-term holding strategy.

As large investors, or “whales,” transfer their assets to private wallets, this trend suggests an anticipation of future price increases. Consequently, this scenario is fostering a bullish sentiment among investors, speculating on potential significant gains in the near term.

Exchange Balances at Record Lows Amid Major Outflows

Bitcoin’s exchange balance has reached a five-year low, falling below 2.3 million BTC. This decline is propelled by major outflows from leading exchanges like Binance and Coinbase, pointing to a market trend towards long-term holding.

Over the past year, Binance, which holds the most Bitcoin reserves, has experienced substantial withdrawals. Similarly, Coinbase saw its largest single-day outflow in 2024, with nearly 16,000 BTC transferred out.

This trend signifies that whales are moving their assets to private wallets, expecting future price increases.

Key Points:

  • Exchange Balance: Below 2.3 million BTC
  • Major Outflows: Binance and Coinbase
  • Long-Term Holding Strategy: Evident

Current Price Analysis and Predictions

On the 4-hour chart, Bitcoin’s current price is $67,731. The pivot point, marked by the green line, is at $68,000, indicating a bearish outlook for Bitcoin as long as it remains below this level.

Resistance Levels:

  • Immediate: $69,000
  • Next: $70,600 and $71,000

Support Levels:

  • Immediate: $66,650
  • Next: $65,950 and $65,150

The Relative Strength Index (RSI) is at 46.62, showing a neutral trend. Meanwhile, the 50-day Exponential Moving Average (EMA) aligns with the pivot point at $68,000. An ascending trendline supports Bitcoin around $66,650, reinforced by a double-bottom pattern.

Typically, a double-bottom pattern can lead to a bullish rebound, which is evident as Bitcoin stabilizes around the $67,750 level.

Technical Indicators:

  • 50-day EMA: Acts as an upper limit near $68,000.
  • RSI: Indicates a neutral to bearish sentiment, currently at 46.62.
  • Double-Bottom Pattern: Suggests potential for bullish rebound.

If Bitcoin surpasses the $68,000 mark, it could aim for the next resistance levels at $69,000 or higher. However, the current bearish signals from the 50-day EMA and RSI make it challenging for Bitcoin to break above $67,800. The formation of doji and spinning top candlestick patterns indicates market exhaustion, with investors awaiting a clear direction.

Market Strategy

  • Pivot Point ($68,000): Monitor closely. A breach above this level could trigger a bullish trend.
  • Bearish Scenario: If Bitcoin falls below $68,000, the market may remain bearish.

Conclusion

In summary, consider buying Bitcoin if it breaks above the $68,000 mark to capitalize on potential gains. Conversely, if it falls below this level, it may signal a bearish trend. Stay vigilant and monitor key technical indicators to inform your trading strategy.