Bitcoin reserves on Coinbase are lowest since December 2017

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Over the past couple of days, Bitcoin has consolidated between significant support and resistance lines, which is arguably good for its price as it’s definitely better than a full correction. Now the data shows us that the Coinbase BTC balance is at levels not seen since December 2017.

Coinbace’s Bitcoin balance drops

One of the ways to gauge the potential for future big moves in the price of Bitcoin is to track the BTC balance on exchanges.

If the number is high, it means there are more bitcoins to trade. This is a very popular metric to look at, and analysts use it to determine the possibility of high volatility in the near future.

Data from popular analytics resource Glassnode reveals that the leading US-based cryptocurrency exchange – Coinbase – has its BTC balance as low as it was in December 2017.

After a period of moderate BTC influx after the May sell-off, Coinbase saw a large coin outflow.

This brings the total balance to just over 700,000 BTC.

The last time the Bitcoin Coinbase balance was at this level was in December 2017.

Bitcoin Balance on Coinbase. Source: Potential implications of Glassnode on the price of Bitcoin

As mentioned above, the fact that the exchange’s Bitcoin balance is low could be seen as a positive sign for the price of BTC. Of course, Coinbase is just one of many exchanges, and they need to be bundled together to form a meaningful thesis for the price.

Information from CryptoQuant – another well-known analytical resource – shows us that there has been a decrease in the amount of BTC held in the wallets of all exchanges as of July 26.

To further support the bullish thesis, the inverse correlation between this metric and the price of bitcoin, as the chart below definitely shows.

All BTC exchange reserves. Source: CryptoQuant

Either way, it’s important to stay alert and keep an eye on the chart. Despite the positive monthly close, it is still essential for Bitcoin bulls to prevent the 200 day moving average from failing as support while tracking recent positive price movements.

Image courtesy of The Conversation

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