Bitcoin’s price action is showing strong bullish momentum as multiple on-chain indicators align to suggest another potential breakout above $90,000. After briefly dipping below $80,000 earlier this month, BTC has staged an impressive 10% recovery to trade above $85,000, backed by improving fundamentals and declining exchange reserves.
Exchange Reserves Drop to 6-Year Low
According to recent analysis from CryptoQuant’s BorisVest, Bitcoin’s exchange reserves have plummeted to levels not seen since 2018, with just 2.43 million BTC currently held on exchanges. This marks a dramatic 28.5% reduction from the 3.4 million BTC peak observed during the 2021 bull market.
This significant decline in exchange-held Bitcoin aligns with other bullish indicators suggesting accumulation, as investors move their holdings to long-term storage wallets rather than keeping them readily available for trading.
Stablecoin Supply Ratio Suggests Untapped Buying Power
The current Stablecoin Supply Ratio (SSR) of 14.3 indicates significant dry powder remains on the sidelines. This metric, which measures the purchasing power available via stablecoins, suggests substantial capital could still enter the market as prices stabilize or continue higher.
Funding Rates Normalize After Recent Volatility
Perhaps most significantly, funding rates have returned to neutral territory between 0.00% and 0.01%, suggesting a healthier market structure following the recent correction. This normalization reduces the risk of cascading liquidations that could trigger sharp downside moves.
Expert Analysis and Price Targets
The combination of declining exchange reserves, healthy stablecoin ratios, and balanced funding rates creates a compelling case for continued upside. Technical analysts have identified similarities to the 2017 bull run pattern, projecting potential targets around $93,000 in the near term.
FAQ
What do falling exchange reserves mean for Bitcoin’s price?
Declining exchange reserves typically indicate accumulation and reduced selling pressure, as investors move coins to long-term storage rather than keeping them available for immediate trading.
How does the Stablecoin Supply Ratio impact Bitcoin?
The SSR helps measure potential buying power in the market. A lower ratio suggests more stablecoins are available relative to Bitcoin’s market cap, indicating stronger potential buying pressure.
What are normalized funding rates?
Funding rates near zero indicate a balanced derivatives market without excessive leverage in either direction, reducing the risk of volatile price swings caused by forced liquidations.