Since December 19th, Bitcoin [BTC] has been facing challenges staying above the $100K mark, yet the overall outlook for the cryptocurrency remains optimistic.
An analysis conducted by CryptoQuant’s Axel Adler revealed that the volume of BTC being transferred to exchanges has reached levels not seen since 2016. Adler pointed out that the last time BTC deposits on exchanges plummeted to this extent, a significant market rally ensued.
“This pattern typically indicates a preference for holding BTC in personal wallets rather than preparing to offload.”
When compared to the early months of 2024, a period during which daily BTC deposits peaked at more than 125K coins, the current figures have dropped below 45K BTC, resembling the levels seen in 2016.
Influx of BTC out of exchanges
Interestingly, the positive forecast mentioned above was further supported by an increase in the movement of BTC out of exchanges.
By analyzing the BTC netflow-to-reserve ratio, Adler observed that the metric was in the negative territory, highlighting a dominance of outflows from exchanges.
This ratio reflects the relationship between net inflows/outflows in comparison to exchange-held BTC reserves.
The negative value indicated that, on average, more BTC was leaving exchanges rather than being deposited, a typical bullish indication.
Overall, the long-term outlook for BTC remained encouraging despite recent selling pressure that has kept the price below $100K.
Meanwhile, BTC’s price has consolidated within the $100K range and the 50-day EMA (Exponential Moving Average) during the holiday period.
Moreover, the daily RSI dropped below 50, signaling a temporary decrease in demand.
If the bearish trend continues in the short run, a potential decline to $90K or $85K could be in the cards.
However, maintaining a position above the dynamic support level of the 50-day EMA could enhance the chance of retesting $100K or experiencing a bullish breakout.