Stock Exchange Supply Drops in ETF Second Wave Ahead of 1.7 Million BTC
Bitcoin (BTC) foreign exchange reserves have reached an all-time low, falling to approximately 1.70 million BTC. This significant decline has sparked discussions about the potential for price increases. The increase is expected to result from a combination of demand shock and inelastic supply dynamics.
Bitcoin Foreign Exchange Reserve is at an All-Time Low
Apollo co-founder Thomas Driver noted the current market sentiment in a post on X. He stated: “Bitcoin FX Reserves are at all-time lows, just in time for the second wave of ETF flows.” He also believes that “demand shock + inelastic supply” will lead to a parabolic rise in Bitcoin price.
His statement underlines the optimistic outlook among investors, who see this low reserve level as a harbinger of a significant price increase. According to Coinglass data, the Bitcoin exchange balance currently stands at 1.72 million BTC.
Foreign exchange reserves are an important measurement in understanding market dynamics. They represent the cumulative result of foreign exchange inflows and outflows. In addition, the decreasing trend in foreign exchange reserves indicates that there is a decrease in selling pressure as fewer coins are offered for sale on stock exchanges.
Conversely, an increasing trend usually indicates that more coins are entering the market, increasing the selling pressure. The current decline in Bitcoin foreign exchange reserves indicates that market participants are withdrawing their cryptocurrencies from exchanges. The pullback is likely to be held for the long term rather than an immediate sale.
Therefore, this behavior indicates a bullish trend in which investors expect higher prices in the future and are therefore reluctant to sell at current levels. Additionally, Thomas Driver provided insight into institutional investment trends, citing Horizon Kinetic Asset Management’s significant allocation to Bitcoin. “Forget the 2-3 percent allocation. Horizon Kinetic Asset Management has $913 million of #Bitcoin invested in IBIT + GBTC, accounting for 14% of the $6.5 billion AUM. “This is an investment.”
The second wave of Bitcoin ETFs is approaching, and some are expecting net inflows of $1 billion for this week. Additionally, institutional growth is expected, which could increase investors’ confidence and raise the BTC price. Additionally, ETF inflows will drive BTC out of the market, accelerating the supply shortage.
Also Read: Bitcoin Price Will Reach New Highs But There is a Condition
Will BTC Price Gain Momentum Again?
Bitcoin has already shown signs of a reversal after previously losing momentum and rallying above $67,000. However, Bitcoin’s 24-hour price change is still in the news. At the time of reporting, BTC price was down 0.54% to $67,030.16 on Monday, May 20. The market cap of the oldest cryptocurrency was $1.31 trillion.
On the contrary, BTC’s 24-hour trading volume increased by 38.91% to $22.60 billion. On the other hand, Bitcoin long positions liquidated $16.71 million, which could lower the BTC price. However, the shorts created a competitive rivalry with liquidations of over $10 million.
Crypto analyst Ali Martinez also weighed in on the situation and pointed out a critical support level for Bitcoin. In a post on X, he wrote: “With over $530,000 BTC traded at $66,250, this is a crucial support level! If this continues, #Bitcoin has the potential to gain more.” This observation suggests that the market could see further bullish momentum if Bitcoin price holds above this support level.
Also Read: Bitcoin Whale Bought 1,590 BTC Amid Price Swing, What’s Next?
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