Bitcoin (BTC) has remained in a consolidation phase, despite a significant decline in the amount of Bitcoin held on exchanges. As of October 8, BTC was trading at $62,540, slightly below this week’s peak of $64,500.
The cryptocurrency is currently down about 15% from its highest point this year but shows potential for a bullish breakout.
Bitcoin Reserves on Exchanges Hit Yearly Low
Data from CoinGlass reveals that Bitcoin reserves on exchanges have dropped to a year-to-date low of 2.34 million. Since February, Bitcoins worth over $31 billion have been withdrawn from exchanges. These funds are largely moving into self-custody wallets or exchange-traded funds (ETFs), which is often a bullish signal as holders are less likely to sell their coins in the short term.
major companies remain optimistic about Bitcoin’s future, including MicroStrategy, Marathon Digital, Block (formerly Square), and Tesla. MicroStrategy leads the pack, holding over 252,000 Bitcoins, while Marathon owns 26,842. Tesla and Block hold 9,720 and 8,211 Bitcoins, respectively.
Smart Money Bets on Bitcoin
Nansen data shows that smart money—investors with a strong track record—has decreased its stablecoin holdings to the lowest levels in years. Stablecoin holdings peaked at 38.5% in May 2022 after the Terra collapse and dropped to 35.7% in November following the FTX crash. The current downtrend suggests that smart money is increasingly bullish on cryptocurrencies, favoring Bitcoin over stablecoins.
Bitcoin Price Technical Analysis: Key Levels to Watch
On the daily chart, Bitcoin continues to trade within a descending black channel since March, resembling a falling broadening wedge—a bullish indicator. Importantly, Bitcoin has found support at the 200-day Exponential Moving Average (EMA), which is typically viewed as a positive sign for potential future gains.
However, the price has formed an evening star candlestick pattern, a bearish signal characterized by a small red body and a long upper shadow. To continue the uptrend, Bitcoin will need to rise above $64,500 and break the descending trendline. From there, the next target for bulls will be the all-time high of $73,800.
Potential Downside Risks
If Bitcoin fails to maintain its momentum and drops below the 200-day EMA at $60,000, it could signal further losses. In this scenario, the price may fall to the lower side of the wedge, around $52,000.
