Bitcoin Exchange Reserves Drop to Lowest Level in 7 Years, Traders Adopt Cautious Approach
Jump into Decrypt's Art, Fashion, and Entertainment Hub - SCENE!
Bitcoin exchange reserves have plummeted to their lowest level since 2018, dropping to 2.488 million BTC on Friday, as revealed by CryptoQuant data. Despite a weekend surge that boosted reserves to 2.492 million, the figure stays low, suggesting a significant shift in the crypto market.
Bitcoin's price currently hovers around $95,400, and the coin aims to build on the gains made last week, following the Trump administration's affirmation of Tariff deal negotiations with China[2]. Interestingly, Bitcoin funds recorded a massive inflow of $3.2 billion in the week ending April 28, contrasting several weeks of negative flows[3].
Simultaneously, the declining exchange balances and increasing fund inflows signal a revived accumulation phase. However, the recent gains seem to involve more retail participation, as evident in the exchange whale ratio dropping from 0.512 on April 17 to 0.36 on April 27[3].
This ratio, which calculates the top 10 exchange inflows relative to the total, indicates that retail traders are playing a more prominent role in the current trading wave[3]. Some traders and analysts link this demand to Bitcoin's partial decoupling from tech stocks and its growing resemblance to gold in recent weeks[3].
However, it's too soon to assert that Bitcoin is evolving into a digital version of gold, as its correlation with gold has fluctuated considerably since the beginning of the year[3]. During this period, the correlation coefficient varied from 0.74 at the end of January, -0.87 in early February, 0.54 in early March, -0.36 in mid-March, 0.62 at the end of March, -0.50 in early April, and 0.55 currently[3].
A more convincing indicator supporting the safe-haven thesis is the Bitcoin dominance index, which indicates a rise from 54% in early December to 63.4% today[3]. This could be interpreted as traders moving from highly volatile altcoins to less volatile Bitcoin.
However, Bitcoin's volatility index hasn't shown a marked reduction in the past few weeks, with April 7 witnessing the index's second-highest reading of 2025[3]. Despite the overall stability, there have been occasional spikes, such as the one that occurred on April 7 when the index rose from 3.4 to 6.71, causing Bitcoin to fall to a five-month low of $74,773[3].
Edited by Stacy Elliott.
Daily Debrief Newsletter
Fun Fact: Bitcoin's price fluctuation in the last seven years mirrors the volatile nature of the entertainment industry. Who knows? Maybe a celebrity endorsement could cause the next significant price jump!
- Amid the crypto market's revived accumulation phase, Ethereum (ETH) recorded a remarkable increase, predicted to touch the $2,500 mark by some analysts.
- As the crypto market evolves, more cryptocurrencies like Ethereum, Bitcoin Cash (BCH), Litecoin (LTC), and others collectively known as altcoins, are becoming increasingly popular among investors.
- The crypto market has expanded, and several financial institutions and exchanges such as Coinbase, Binance, Kraken, and Gemini offer trading options for various digital assets like Bitcoin (BTC), Ethereum, Ripple (XRP), and many altcoins.
- Numerous Initial Coin Offerings (ICOs) have flooded the crypto market in recent years, offering different investment opportunities for those interested in the crypto space and digital assets.
- By 2025, experts compare the crypto market to the nascent stages of traditional finance, anticipating wider adoption, increased regulation, and further growth in the market capitalization.
- According to CryptoQuant's data, the accumulation phase for Bitcoin could indicate a potential price increase, emphasizing the importance of monitoring the crypto market for investors.
- Some investors choose to pool their digital assets into investment vehicles like Bitcoin trusts or index funds rather than directly owning the underlying cryptocurrencies, providing another avenue for investing in the crypto market.
- As Bitcoin strives to prove itself as a viable digital asset, its price comparisons with other investments like gold and tech stocks have become increasingly common, shedding light on its potential growth and role in the global finance sector.
