Fresh analysis from CryptoQuant suggests Bitcoin (BTC) may be significantly undervalued at current price levels, with multiple on-chain metrics pointing to sustained accumulation patterns and bullish market structure. This comprehensive analysis comes as technical patterns increasingly mirror the 2017 bull run that could target $93,000.
Exchange Reserves Hit 7-Year Low as Holders Accumulate
According to CryptoQuant analyst BorisVest, Bitcoin exchange reserves have plummeted to just 2.43 million BTC – marking a dramatic 28.5% decline from the 3.40 million BTC held on exchanges during the 2021 bull market peak. This significant reduction in available supply suggests strong accumulation behavior from long-term holders.
“The massive exodus of Bitcoin from exchanges represents the longest sustained period of accumulation we’ve seen in seven years,” notes BorisVest. “With supply continuously moving to cold storage, we’re seeing classic signs of supply shock formation.”
Stablecoin Supply Ratio Suggests Strong Buying Power
The analysis highlights Bitcoin’s Stablecoin Supply Ratio (SSR) currently sitting at 14.3 – well below the 2021 peak of 34. This indicates substantial dry powder remains on the sidelines, ready to enter the market. This metric gains additional significance as recent projections suggest the stablecoin market could reach $2T by 2028.
USDT Dominance Shows Risk-On Shift
Adding to the bullish narrative, declining USDT dominance suggests investors are rotating out of stablecoins and into risk assets like Bitcoin. This shift in market positioning typically precedes significant upward price movements.
Technical Indicators Align with On-Chain Strength
The weekly RSI has broken its downtrend, while exchange net flows signal continued accumulation. These technical indicators, combined with strong on-chain metrics, paint a compelling picture for Bitcoin’s medium-term outlook.
FAQ Section
What does declining exchange reserves mean for Bitcoin?
Declining exchange reserves typically indicate that investors are moving Bitcoin to long-term storage, reducing available supply for trading and potentially creating upward price pressure.
How does the Stablecoin Supply Ratio affect Bitcoin’s price?
A lower SSR suggests there is significant stablecoin buying power relative to Bitcoin’s market cap, indicating potential for price appreciation if this capital enters the market.
What’s the significance of the current $85,550 price level?
This price level represents a critical juncture where on-chain metrics suggest undervaluation, despite being near all-time highs.