Bitcoin's price surge past $100,000 may hit a roadblock as the amount of Bitcoin held in exchange reserves continues to climb. This uptrend implies that more coins are being transferred to exchanges, potentially leading to increased selling pressure. As a result, breaking the crucial $100,000 mark becomes more challenging.
The surge in Bitcoin's exchange reserves is causing concerns about a potential sell-off. Recent data from CryptoQuant reveals a consistent increase in the amount of Bitcoin held in exchange wallets since February 6, reaching 2.47 million BTC as of now, marking a 1% rise since the start of the month.
The exchange reserve of Bitcoin signifies the total volume of BTC stored in exchange wallets. A spike in this metric indicates a higher influx of coins into exchanges, hinting at a growing selling force in the market.
This rise in exchange reserves aligns with Bitcoin's sideways price movement in February, with the leading cryptocurrency encountering resistance around $98,663 and support at $95,650 over the past two weeks. The growing exchange reserves point to ongoing sell-offs that impede a substantial upward breakthrough. If this trend continues, there is a possibility of a downside breakout, posing a risk of a price correction for Bitcoin.
Adding to the concerns is the noticeable reduction in activity among BTC whales - addresses holding significant amounts of the cryptocurrency. In the past week, the netflow of large holders has plummeted by 299%, indicating a substantial selling activity on their part.
When the netflow drops, it signifies that whales and institutional investors are depositing more tokens into exchanges than withdrawing them, showcasing heightened selling pressure from major holders. This pattern could influence retail traders to follow suit, exacerbating the downward pressure on Bitcoin's price.
Bitcoin now stands at a crucial juncture, where it could either test the $95,650 support level in the face of intensified sell-offs or aim for a breakout above the $98,663 resistance. In the former scenario, a breach of the support could lead Bitcoin's price towards $92,325. Conversely, a surge in demand might drive a breakout above the resistance, potentially pushing Bitcoin's price towards $102,753 and even its all-time high of $109,356 achieved on January 20.