The recent rise in bitcoin price was preceded by a significant amount of btc leaving centralized exchanges. Over the past week, investors have turned to exchanges to withdraw their btc holdings, supposedly to store them in private wallets.
30,000 btc leave exchanges
On October 18, crypto analyst Ali Charts revealed that more than 30,000 btc had left exchanges. The data spanned a five-day period that showed massive withdrawals by crypto investors from these centralized exchanges.
The chart shared by the analyst shows that the accumulation started at the beginning of the week and continued until the rally began. This accumulation eventually caused a total of 33,000 btc worth approximately $925 million to be moved to private wallets.
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btc leaving exchanges | Source: X
Typically when bitcoin moves away from exchanges, it is bullish for the currency because it means these investors are not looking to sell their tokens right now. The smaller the number of investors who want to get rid of their btc, the lower the selling pressure on the coin.
This lower selling pressure allows demand to increase over time and the result is usually a price explosion. This was likely the case on Thursday when the price of bitcoin began to rise, briefly reaching $30,000 before correcting lower again.
bitcoin open interest rises
As the price of bitcoin rose, open interest in the asset also grew. Data from Coinglass shows that in the last 24 hours, bitcoin‘s total open interest has grown by almost 8.5%. This translates to over $1.3 billion in open interest added by investors over the past day.
This rapid increase in open interest suggests that there is a greater willingness among investors to participate in the market. Furthermore, most of the open interest has been focused on short contracts, meaning investors expect the btc price to fall.
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Open interest rises 8% | Source: Coinglass
However, this could lead to what is called a short squeeze in which the price of bitcoin rises once again and shakes the market bulls. This could lead to the liquidation of millions of dollars in shorts, leading to massive losses for those betting on the price of bitcoin to fall. If short sellers prevail, then bitcoin could fall back towards the $28,000 level.
For now, bitcoin is struggling to hold support at $29,500. A fall below this support would put the bears in control, leaving the next significant support for bitcoin at $29,000.
<img decoding="async" loading="lazy" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2023/10/1697833204_179_30000-BTC-Leave-Exchanges-Is-This-the-Exodus-That-Starts" alt="Tradingview.com bitcoin Price Chart” width=”2670″ height=”1746″/>
btc sitting above $29,600 | Source: BTCUSD on Tradingview.com
Featured image from MarketWatch, chart from Tradingview.com
