The past couple of days saw Bitcoin consolidating between important support and resistance lines, which is arguably good for its price as it’s definitively better than a flat-out correction. Now, data shows us that the Coinbase BTC balance sits at levels not seen since December 2017.
Coinbace Bitcoin Balance Go Down
One of the ways to gauge the potential for upcoming big moves in Bitcoin’s price is by following the BTC balance on exchanges.
If the number is high, it means there are more bitcoins to be traded. It’s a very popular metric to look at, and analysts have been using it to determine the possibility of high volatility in the near-term future.
Data from the popular analytics resource, Glassnode, reveals that the leading US-based cryptocurrency exchange – Coinbase – has its BTC balance as low as it was back in December 2017.
After a period of moderate BTC inflows following the May Sell-off, Coinbase has seen a large outflow of coins.
This brings the total balance to just over 700k BTC.
The last time the coinbase Bitcoin balance was at this level was December 2017.
Potential Implications on Bitcoin’s Price
As mentioned above, the fact that the exchange’s Bitcoin balance is low could be considered a positive sign for BTC’s price. Of course, Coinbase is just one of many exchanges, and they need to be taken into aggregation to form any meaningful thesis for the price.
Information from CryptoQuant – another well-known analytics resource – shows us that there’s been a decrease in the amount of BTC held in all exchanges’ wallets starting on July 26th.
To further support the bullish thesis is the inverse correlation between this metric and bitcoin’s price, as definitively depicted in the chart below.
In any case, it’s important to remain vigilant and keep an eye on the chart. Despite the positive monthly close, it’s still critical for Bitcoin bulls to prevent the 200-days moving average from failing as support while also following up on the recent positive price movements.
Featured image courtesy of The Conversation