- CryptoQuant data indicates that there has been an increase in Bitcoin exchange reserves since Saturday.
- Analysts hypothesized that an increase in short-term holder trading activity on centralized exchanges was the explanation, ruling out exchange transfers by the German government.
The last week has seen an increase in Bitcoin exchange reserves, per CryptoQuant data. Analysts at CryptoQuant discounted German government exchange transfers as the reason for the spike, instead blaming it on a surge in short-term holders’ trading activity on controlled exchanges.
The steep 2.8% fall in the quantity of the digital asset on exchanges that happened last Friday is reversed by Thursday’s growth in exchange reserves for bitcoin. This is in contrast to the general 9.5% decline in exchange reserves that has been occurring since the start of the year.
As of right now, the bitcoin exchange reserves have increased by 0.5% to 2,779,197 from 2,767,490 on Saturday, as per data from CryptoQuant. At a time when investors are susceptible to supply-side pressures from exchange transfers of bitcoin that have been confiscated from the digital wallet of the German government and the distribution of bitcoin to creditors of Mt. Gox, this tendency raises the liquid supply of bitcoin.
An increase in the activities of short-term holder trading
Julio Moreno, Head of Research at CryptoQuant, claims that the rise in total bitcoin reserves on exchanges is mostly due to higher reserves at the centralized cryptocurrency exchanges Bitfinex, OKX, and Binance.
Moreno, nevertheless, rejected the idea that exchange transactions from organizations such as the bitcoin wallet of the German government had anything to do with the reserve growth.
As the majority of bitcoin inflows come from short-term holders and don’t appear to be connected to the German government seizing bitcoin, Moreno said that this could instead be attributed to increased trader activity.
As to the data obtained from Arkham, the German government presently possesses less than 10,000 bitcoins in its digital wallet, out of the total amount of over 50,000 bitcoins that were confiscated from the Movie2K website, which is no longer in operation. Transfers to centralized exchanges like Kraken, Bitstamp, and Coinbase are mentioned by Arkham. The German government contributed 2,000 bitcoins to Flow Traders, a cryptocurrency market maker, in within the last hour, according to data from Arkham.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
