Bitcoin Price Analysis: BTC Remains Bearish As Exchange Reserves Hit 7-Year Low
Bitcoin (BTC) extended its losses during the ongoing session, losing momentum after a brief spike to $106,059. However, the flagship cryptocurrency has demonstrated resilience, maintaining its position above $105,000, indicating strong support at this level.
Meanwhile, BTC exchange reserves hit their lowest level in seven years as institutions scooped up the asset and locked it away.
Truth Social Files For Spot Bitcoin ETF
Truth Social’s parent company has filed for a spot Bitcoin ETF. According to a filing with the Securities and Exchange Commission (SEC), NYSE Arca submitted form 19b-4 on behalf of Yorkville America Digital, the asset manager behind the proposed Truth Social Bitcoin ETF. The ETF will track the price of Bitcoin and list it on NYSE Arca. The firm has not disclosed a ticker or management fee. However, it named Foris DAX Trust Company as the ETF’s proposed custodian. The SEC has 45 days to issue a decision or delay the filing. The agency can take up to 240 days to decide under current rules. Yorkville must also submit an S-1 registration detailing the ETF’s structure, risk factors, and use of proceeds.
If approved, the ETF will join 11 approved spot Bitcoin ETFs, led by BlackRock’s IBIT, with almost $69 billion in assets.
“The Trust seeks to reflect the performance of the price of bitcoin before payment of the Trust’s expenses and liabilities.”
Shrinking Supply Could Trigger Bitcoin Breakout
Bitcoin’s circulating supply is witnessing a downturn, setting the stage for exponential price surges as demand grows. The observation was made in Sygnum Bank’s Monthly Investment Outlook. Sygnum analysts highlighted that Bitcoin’s liquid supply fell 30% over the past 18 months, driven by growing institutional adoption and the emergence of Bitcoin acquisition vehicles. These entities have been gradually scooping up Bitcoin from exchanges, a move typically viewed as bullish. The report stated,
“Bitcoin’s fast-shrinking liquid supply is creating the conditions for demand shocks and upside volatility.”
Bitcoin balances on centralized exchanges have dropped by about 1 million BTC, with the trend accelerating as funds issue equity or debt to purchase the flagship cryptocurrency. Geopolitical tensions, fiscal uncertainty, and rising trade tensions have also led to investors turning towards Bitcoin and crypto.
Bitcoin Could Soon Face An Existential Crisis
Expert cryptographers, business leaders, and some Bitcoin community members are worried about the emergence of a quantum computing threat to Bitcoin. According to computer and security experts, a quantum computer strong enough could reverse engineer wallets’ private keys and disrupt the Bitcoin market, depositing old BTC back on exchanges and sending prices plummeting. While the threat was initially shrugged off, experts have calculated that the Bitcoin community has less than a decade to create contingency plans and address the threat. Jameson Lopp, CTO and co-founder of self-custody service Casa, advocated for preparedness, stating,
“It’s difficult to say that we have decades because it seems like the timelines are getting compressed. The real question is: Can Bitcoin come together and find consensus on how to mitigate this threat before it really becomes an existential crisis?”
Bitcoin is highly vulnerable to quantum computers that could reverse engineer private keys, allowing bad actors to steal assets from leading centralized exchanges, abandoned coins by early network manners, and even BTC belonging to Bitcoin’s legendary creator, Satoshi Nakamoto. Last week, a research paper from Google stated that breaking the RSA encryption that secures private keys could require over 20 times fewer quantum resources than previously estimated.
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) is consolidating around $105,000 as it trades in a narrow range from $103,000 to $106,500. The flagship cryptocurrency has been subdued as profit-taking, ETF outflows, and buyer exhaustion weigh on momentum. Despite this, BTC is up 2% from Monday’s low of $ 103,734. Bitcoin exchange reserves have also declined at an alarming pace as corporate interest in the asset surges. According to data from CryptoQuant, exchange reserves are currently just above 2.38 BTC, 13% lower than the 2.75 million BTC recorded on January 1.
Falling reserves suggest exchanges are holding fewer coins, with investors moving them into cold wallets for long-term storage, reducing selling pressure as investors aggressively buy BTC from the exchanges, leading to a substantial uptick in demand and price. Additionally, Glassnode noted an increase in entity-adjusted realized profit, which rose above $500 million per hour thrice within a 24-hour window, indicating that traders were locking in massive profits.
“Realized Profit Surge Entity-adjusted realized profit spiked above $500M/hour three times in the past 24 hours, signaling intense profit-taking activity.”
The entity-adjusted realized profit is a metric that measures the total gains locked in wallets after adjusting for internal transfers and entity clustering, offering an accurate view of how much real profit is being taken across the market.
BTC registered a sharp drop on Friday (May 23), falling nearly 4% to $107,356. The price recovered over the weekend, rising 0.46% and 1.16% to cross $109,000 and settle at $109,103. Buyers retained control on Monday as BTC rose 0.32% to $109,453. Despite the positive sentiment, BTC lost momentum on Tuesday, dropping 0.46% to slip below $109,000 and settle at $108,954. Sellers retained control on Wednesday, dropping over 1% to $107,834. Selling pressure intensified on Thursday as BTC fell over 2%, slipping below the 20-day SMA and $105,662. BTC continued to decline on Friday, falling 1.51%, falling below $105,000 and settling at $104,067.
Source: TradingView
BTC recovered over the weekend, rising 0.69% on Saturday and nearly 1% on Sunday to reclaim $105,000 and settle at $105,775. BTC fell to an intraday low of $103,734 on Monday as selling pressure intensified. However, it rebounded from this level to register a marginal increase and move to $105,905. The price lost momentum on Tuesday, falling 0.44% to $105,435. The current session sees BTC marginally down as buyers and sellers struggle to establish control.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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