Bitcoin On-Chain Data Reveals Why This Selloff Is Different From May’s Crash

Bitcoin on-chain data shows the exchange reserve indicator looks different for the current selloff when compared to the May crash. Bitcoin Spot Exchange Reserve Continues To Decline Despite The Huge Dip As pointed out by a CryptoQuant post, the BTC reserve on spot exchanges has actually declined amidst the current price dip. The Bitcoin all exchanges reserve is an indicator that shows the amount of coins present in wallets of all the centralized spot exchanges. When the reserve’s value moves up, it means more investors are sending their BTC to exchanges for withdrawing to fiat or altcoin purchasing. Similarly, a downtrend in the metric implies investors are withdrawing a net amount of Bitcoin from exchange wallets to personal ones for hodling them, or selling through OTC deals. Here is a chart showing how the value of the indicator has changed in the past year: The Bitcoin exchange reserve seems to be going down | Source: CryptoQuant Now, on examining the above graph, some interesting features can be seen. In the lead-up to the 2021 bull run, the exchange reserve was coming down from a very high value. This makes sense as a downtrend like that one means investors were accumulating more coins, which can help drive the price up. Then, around when Bitcoin hit its all-time-high (ATH), the metric started climbing back up quick, indicating a selloff, and thus the price crashed in response. Related Reading | Panama To...