Signs of a Bull Market in Its Infancy

The chart below from Crypto Quant shows something quite extraordinary. Pay attention to the blue line. It shows reserves on crypto exchanges falling… and falling.

What this means is people are moving coins off exchanges, which is a sign they have no intention of selling.

When supply evaporates and demand remains constant, there’s only one way for the price to go and that is up.

The same chart shows what happened in late 2022. BTC dropped below $20k and exchange reserves also dropped – again, a sign of confidence that a price reversal was probably on its way. In prior cycles, a rise in BTC was accompanied by more coins moving onto exchanges.

That trend has been ruptured this time around.

There appear to be a couple of parallel themes emerging here:

• Bitcoin available for sale on exchanges is declining due to a belief that the bull run is just beginning.
• Bitcoin is moving into stronger hands. There will only ever be 21 million in issue, so the scarcity factor is beginning to manifest through less selling pressure.
• ETFs have been active in recent weeks in propping up prices. Institutional support is real, and growing.
• The very real concerns that global debt is crippling and unsustainable, coupled with escalating tensions in Ukraine and the Middle East, has prompted a flight to safety.

A break through $100k will likely prompt a melt-up before there is a consolidation. That may take several more months to develop so long as the bulls are firmly in control.