This chart displays an important indicator in analyzing the cryptocurrency market called "Exchange Reserve".
What is Exchange Reserve?
It is the total amount of Bitcoin currently held in the wallets of all trading platforms (like #Binance , Coinbase, etc.). This indicator helps analysts understand investors' intentions.
Chart Analysis:
* The purple line (Exchange Reserve): We notice that it is clearly in a downward trend. This means that the amount of Bitcoin available for sale on the platforms is decreasing. Investors are withdrawing Bitcoin from the platforms and storing it in their private wallets.
* The black line (Bitcoin price $BTC ): We observe that it is in an upward trend coinciding with the decrease in Exchange Reserve.
What does this mean?
The relationship between the two lines is the most important point:
When investors withdraw their coins from the platforms, this is usually a positive and bullish signal for the price. The reason is that they do not intend to sell them in the near term, but prefer to hold them for long-term investment (known as "HODL").
Summary:
The picture shows that the supply of Bitcoin available for sale on the platforms is decreasing, which reduces selling pressure, and this is considered one of the factors that could drive the price up, which is already reflected in the chart where the price of Bitcoin rises as the reserve decreases.
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