In the last several days, bitcoin (BTC) has been consolidating between the important resistance and support lines that are arguably good for the price in the market as it is definitively better than a flat-out correction. Currently, data shows that the Coinbase bitcoin balance remains at levels that have not been seen since December 2017. What does that mean?
One of the ways to gauge the possibility of an upcoming major move in the market is by following the Bitcoin balance on exchanges. In case the number is high, it means that there are more BTCs to be traded. It is quite a popular metric to look at, and analysts have been using it to determine the probability of high volatility in the short term.
Data acquired from the popular analytics resource, Glassnode, indicates that the leading US-based crypto exchange – Coinbase – has its Bitcoin balance as low as it was sometime back in December 2017.
“After a period of moderate BTC inflows following the May Sell-off, Coinbase has seen a large outflow of coins.”
It brings the total balance to just about 700k bitcoins. The last time the BTC balance was at that level was in December 2017.
Possible Implications On BTC’s Price
As already mentioned, the fact that the crypto exchange’s BTC balance is low might be considered to be a positive sign for bitcoin’s price. Coinbase is just one among many other exchanges and must be taken into aggregation to create any meaningful thesis for the bitcoin price.
Information acquired from CryptoQuant, a renowned analytics resource shows that there has been a drop in the amount of bitcoin held in all exchanges’ wallets from July 26. To also support the bullish theory is the inverse correlation between the metric and BTC’s price, as definitely shown in the chart below.
But, it is crucial to remain vigilant and focus on the charts. Despite a positive monthly close, it is still important for the bitcoin bulls to prevent the 200-days moving average from failing to hold as support while also following up on the recently recorded positive price movements.