Topic: Bitcoin Reserves on Coinbase the Lowest Since December 2017 (Read 256 times)

This is not proven though,,, and if I judge from the people I know and interact with, they are simply just leaving their coins in other types of services accounts. I even admit I keep a small amount in casinos to gamble with and sometimes I should be withdrawing it all but I leave it there to perhaps gamble with a bigger bankroll down the line,,, not wise, but I think this is also the behavior of majority of us.

First of all exchanges don't really own those bitcoins. The balance belongs to users who have deposited their bitcoins on exchanges for trading and the exchange can't just sell those coins themselves!
Even if they do open orders on their own platform to sell those bitcoins for shitcoins, there still has to be other traders who have signed up on their platform to buy bitcoin with their shitcoins (aka dump their shitcoin) and then withdraw those bitcoins which is the same thing as people dumping shitcoins and withdrawing bitcoin as ever!

Coinbase having low bitcoin reserves can also mean that these centralized exchanges are diversifying more of their value into Alts and not just Bitcoin by, for example, exchanging their BTC for these Alt-coins. Any such analysis that only considers the level of Bitcoin reserves will be misleading without the data of how overall reserves have changes and what part has been taken over by Alts.

Coinbase and every single centralized exchange exists for the trading fees they get from people dabbling in Alts. In fact, they actively encourage all kind of Alt-coins to as a strategy to create a market. Exchanges run promotions for Alts and give away tokens to people for learning about these new coins. They are the ones that stand to benefit the most from more and more retail consumers getting into trading Alts.

What do people think about exchanges biases towards Alt promotion??

There is a problem with that. I don't use Coinbase but I would assume that all users there have to undergo KYC before they can buy and withdraw, right? That means that Coinbase knows exactly who bought or sold what on their platform and where they sent those coins to. You can't protect your anonymity on centralized exchanges where you have undergone KYC. You can mix your coins after withdrawing from the site, but the exchange will always know what you had at one point.

This is most likely the correct answer due to the past history of exchange hacking, they want to keep their bitcoins privately without being controlled by any exchanges out there. They looking to hodl it for a long that's why they want to keep it somewhere safe without anyone know about it. I think it's time for every investor to consider to take heed about what happened to those exchanges that have been closed due to hacking and the users didn't recover any BTC from those exchanges. They really need to consider keeping their BTC privately without using any exchanges for their crypto assets to be safe.

I am not going to speculate whether or not the fact that a lot of Bitcoin is being withdrawn from Coinbase is a good or a bad sign. But I do see a few positives in it:

- Crypto owners prefer to keep their coins in their own private wallets. Hopefully open-source and non-custodial ones.
- A smaller amount of bitcoin on Coinbase means less selling pressure. Temporarily at least. We know that all that can change in the space of a few blockchain confirmations when thousands of Bitcoins can be dumped.
- The smaller supply coupled with increased demand affects the price positively.   

The Coinbase reserves were at a peak back in January 2021 and they started falling down during the entire 2021.I don't think that this has something to do with the Bitcoin market being bulling or bearish.The Coinbase reserves were falling at the bullish market in the first quarter of 2021 and continued falling during the price crash,which occurred in May and the stagnant summer BTC market.The Bitcoin price recovered a little bit recently,but the Coinbase reserves aren't going up.
I guess that the Coinbase reserves pattern can be explain with many people being disappointed by Coinbase and leaving the platform.

It's very interesting to see this sort of information in a nicely formatted graph. If you picture Coinbase as primarily driven by retail customers who hold funds there, then the evidence would seem to suggest that individuals have been selling their holdings and that money has steadily moved off the platform. I don't think it's just a coincidence that companies like Paypal were announcing their own moves into Bitcoin since that dip started and it's likely a lot of financial institutions/whales will be contributing to that drop. Who knows what it will lead to in the future, but it is probably bad for Bitcoin in the long run if it is being consolidated into fewer and fewer wallets.

Coinbase has become the first crypto company to raise an IPO, and crypto-related activities come under increased scrutiny. Another factor is the wave of Bitcoin migration from exchanges to cold wallets. Not only Coinbase but most major exchanges reduce the amount of Bitcoin.

Bitcoin balances on exchanges have dropped a lot since the 3rd Bitcoin halving. I am not surprised by the title of the post, almost all major exchanges have a drop in the number of Bitcoins.

first of all how to gather thoose data, i mean is that valid counted from hot and cold wallet ?


maybe it because some company start adopting bitcoin and transfer it to their cold wallet and more people buy it following bitcoin trend

It can be from good practice of non-custodial wallet usage or manipulations.

Bitcoin can be moved very easily from a wallet to another, and block time is 10 minutes. Set a high fee rate (if necessary) and get a confirmation within 10 minute. So whales can move their bitcoin around and take profit within around 10 to 20 minutes.

However, I know whales would prefer to use OTC for their activities.

In fact,,, maybe reserves on exchanges like Coinbase indicate people are just preparing to sell off as well. I know some people make the decision to liquidate by moving everything they want to sell on a reputable exchange like Coinbase (and not Binance for example) to take advantage of low fees and fast confirmations so they can place limit orders for the price they expect. Not that Coinbase is safer,,, but it is perceived to be.

From your own chart you can see that when this bull market started in the end of 2020, the amount of Bitcoin reserves on Coinbase was at ATH for quite some time, then it started lowering even while Bitcoin had a dip. I think there's no strong correlation here that could allow to predict the long term price movement. People very easily can send thousands of Bitcoin tomorrow to dump them. Maybe it only means that investors are becoming more aware of the risks of holding coins on centralized exchanges.

I think this can also be considered as one of the condition in which bitcoin owners believe in a better future potential than trading them on the current exchange. I agree that this is good news for bitcoin even though we all don't know exactly what will happen to bitcoin and its price in the future. The awareness of bitcoin owners not to let their bitcoins be stored with third parties is also a pretty good improvement in terms of user knowledge. It is not safe to entrust bitcoin to exchange or trading platform as we do not have complete control over them.

That's good news then,
That means people are leaving from coinbase. Total balance of an exchange decreases when traders of that exchange have low funds.
There may be other reasons for this. You know Bitcoiners are already very aware nowadays, maybe because of the rising price of bitcoin they can no longer rely on centralized exchanges and have stored their funds in non-custodial wallets with withdrawals from Coinbase to keep themselves in control. So the total balance of Coinbase has decreased. Seems traders are getting ready for the next Bull-run.

Most likely good news, there has been promise of a supply shock & subsequent, face melting pump for a while now. It should transpire in the next few months. HODL & be patient, great riches are coming.

It does make logical sense especially when we remember also towards end of last year exchanges also had low BTC reserves but this is to me always just retail people,,, OTC is always able to buy or sell big volumes. Then again we remember also the same happened in 2018 but rally did not come as expected right?

Or it could mean that bitcoin investors are putting in on wallets that they have total control, meaning holding for long term. But the trading volume is another gauge though, it might or might not correlate to bitcoin reserves, but still a lot to say that whether you are holding it on your wallet and not on exchanges shows that investors or speculators learn not to trust this centralised exchanges.

I disagree.
As you may already know the balance on exchanges shows how many people are trading bitcoin. When it is higher it shows there is a lot more traders and when it is lower the opposite.
This means that "the balance" can only show the current market situation and the recent past and says that price has been moderately stable (have less big fluctuations). However it can not predict anything about the future or near future, whether positive or negative.
It could also show that traders "expect" little fluctuations but again that is not predicting the future, it just shows what many traders expect which can be wrong.

The only way this could be considered good news is that it shows less bitcoin is stored in centralized places where users have no control.

Such a classic illustration of supply and demand. There's almost a perfect symmetry right there. The price and Bitcoin's reserve are mirrors of each other.

Anyway, the best thing about Bitcoin is that there is a rising demand and a dwindling supply. What's circulating right now is almost 90% of the entire Bitcoin supply already. Despite that, we are already fast running out of supply in exchanges. That in spite of the fact that the adoption is still at its infancy, with only less than 5% of the world's population into it. The remaining 10% of Bitcoin's supply would be released gradually over the next hundred years. And there's still more than 7 billion people right now who have yet to start buying their share of the Bitcoin pie. Logic tells me this is extremely bullish.

Over the past few days, Bitcoin has been steady between important support and resistance lines, which is probably good for its price because it is definitely better than a full correction. Now, the data show us that Bitcoin Coinbase inventory is at a level not seen since December 2017.

Coinbace Bitcoin Balance Go Down
One way to gauge the potential for big Bitcoin price movements in the future is to follow the BTC balance in exchanges.
If this number is high, it means that there is more bitcoin to trade. This is a very general criterion to look at, and analysts use it to determine the likelihood of large fluctuations in the near future.
Data from the popular analytics source, Glassnode, shows that the BTC inventory of the US-based cryptocurrency exchange Coinbase is as small as December 2017.
After a period of balanced BTC inflows following massive May sales, Coinbase has seen a large outflow of bitcoins.
These outputs bring the total inventory to just over 700,000 BTC.
The last time Bitcoin inventory was at this level was in December 2017.



Possible consequences for the price of bitcoin
As mentioned above, the fact that the bitcoin balance of this exchange is low can be considered a positive sign for the price of BTC. Of course, Coinbase is just one of several exchanges, and they need to be considered in order to form any meaningful thesis about price.
CryptoQuant data - another well-known source of analysis - shows us that since July 26, the amount of BTC in the wallets of all exchanges has decreased.
To further support this bullish thesis, there is an inverse relationship between this benchmark and the price of bitcoin, which is definitely shown in the chart below.



In any case, it is important to stay vigilant and monitor the chart. Despite the positive closing of the monthly candlestick, it is still important for bitcoin cows to avoid breaking the 200-day moving average as support, while also following the recent positive price changes.

Source: https://cryptopotato.com/bullish-bitcoin-reserves-on-coinbase-the-lowest-since-december-2017/