Bitcoin Holding Sentiment Strongest in Nearly Two Years

Aug 18, 2020 at 11:49 UTCUpdated Aug 18, 2020 at 14:29 UTC

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Bitcoin exchange reserves have fallen to a 21-month low, a possible sign investors are feeling bullish about the shape of the market.

Glassnode data shows the number of bitcoins held in exchange addresses fell by 0.83% to 2,610,278 BTC on Monday, the lowest level since Nov. 24, 2018.
Investors tend to move digital assets from their wallets and onto exchanges when they lose confidence in the current price movement so they can easily sell them.
In the days leading up to the Black Thursday sell-off, when bitcoin crashed by 40%, exchange balances surged by 2% to a high of 2,947,555 BTC.
But bitcoin has since surged to a 13-month high of $12,400 on Monday and is currently up 200% from the $3,867 low it fell to five months ago.
As such, exchange balances are down 1.4% over the past week, and nearly 3% in the last month. Balances were down more than 11% from the March 13 high at press time.

Bitcoin: Balance on ExchangesSource: Glassnode

The price rises come despite bitcoin looking increasingly overbought on the weekly chart relative strength index (RSI) – an indicator that helps traders recognize the signs of overbought and oversold markets.

Bitcoin’s weekly relative strength index has crossed above 70.00 – a sign the rally is overdone and a pullback is overdue.

eToro analyst Simon Peters told CoinDesk: “Lower BTC spot exchange balance indicates a current holding mentality among investors, I see this as being pretty bullish.”

See also: First Mover: As Wall Street Goes Topsy-Turvy, Crypto Traders Are Bullish as Ever

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