Bitcoin is currently trading at $11,834 after a significant breakout yesterday. Now the bulls are eying $12,000, a crucial psychological level. While the trading volume for Bitcoin is decreasing on exchanges like Binance and others, there is good news for the first-ranked digital currency.
According to a recent report by CryptoQuant on August 5, the number of Bitcoin on exchanges has seen a dramatic drop in the past week. Before the massive Bitcoin breakout, the number of coins inside all exchanges was around 2.49 million BTC, with Coinbase and Bitfinex on the front.
This number has fallen to 2.39 million Bitcoin, the lowest number reported by CryptoQuant ever. This is a massive indicator of how bullish Bitcoin and the market currently are. Usually, if an asset experiences a sudden spike in price, investors will deposit to take profits, in this case, investors are buying and withdrawing to hold in the long-term.
Cole Garner commented on this fact saying that BTC flowing out of exchanges is bullish.
The amount of #Bitcoin held on exchanges just dropped off a cliff.
It happened two days ago – whales bought up the selloff. $BTC flowing out of exchanges is *bullish*
(chart h/t @cryptoquant_com) pic.twitter.com/yiPO4tvttw
— Cole Garner (@ColeGarnerBTC) August 6, 2020
According to a user, around 68101 BTC was transferred from Binance to a newly created wallet. He also stated that it could be a 3rd party custody wallet or a new cold wallet. While this is certainly a possibility, it would still be considered bullish since Binance decided to reduce the portion of hot wallets in charge of withdrawals.
Bitcoin Technical Analysis
Bitcoin is trading at $11,800, way above the daily 12-EMA at $11,106 and the 26-EMA at $10,508. The trading volume is dropping while the RSI has crossed into the overbought zone again. The next most important resistance point is located at $12,123. There is also a psychological resistance point at $12,000 and then $12,330, established in August 2019.
On the monthly chart, Bitcoin needs to break $13,970 and ultimately $14,000 to confirm a monthly uptrend.
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