The latest data shows a correlation between Bitfinex reserve and Bitcoin prices when it dropped to $35,000 as of late so let’s read more in our latest bitcoin news.
As pointed out by an analyst in CryptoQuant, the movement in Bitfinex reserve seems to be having an impact on the BTC price recently. The on-chain indicator is the derivatives exchange reserve that measures the total amount of BTC held in wallets of the exchange. The exchange in focus here is Bitfinex which is why this metric is called the Bitfinex reserve. When the value of the indicator increases, it means that more coins are being deposited to the exchange and this trend could be bearish as the supply of BTC on exchanges indicates the selling supply as the data shows correlation between both.
On the other hand, when the reserve’s value goes down, it means that investors are transferring their coins out of the exchange and this kind of trend is usually bullish and implies the selling supply is going down. There’s a chart that compares the trend of the Bitfinex reserve as well as the BTC price over the past month. There also seems to be a correlation between the Bitfinex reserve and the BTC price over this period.
The exchange’s reserve showed a gradual uptrend that lasted for a few weeks and at the same time, the price of crypto dropped with a similar gradual trend. Both the price and the reserve moved sideways but then the bitfinex reserve had a sharp spike up with the price of BTC dropping down. The quant believes that the trend could suggest that the movement in Bitfinex reserve could be behind the crash in the price below $35,000. at the time of writing, BTC’s price floats around $33.8K which is down by 21% in the past week, and over the past month, it lost 33% of value. Since the crash, BTC hasn’t shown a huge recovery but the price seems to be further going down and it is unclear when a bottom could be hit.
