Analysis: Bitcoin exchange net inflow to reserves ratio shows market is in accumulation phase

Despite the short-term volatility, key indicators still point to a bullish long-term outlook for Bitcoin. An analysis by analyst Axel Adler highlights Bitcoin’s exchange netflow-to-reserve ratio, which shows that the market is in an accumulation phase and BTC is moving from exchanges to long-term storage (addresses), indicating that investor confidence is increasing and prices may rise as the market matures. A negative value for this ratio means that more BTC is being withdrawn from exchanges than deposited, indicating that users are holding it in private wallets rather than actively trading. This reduces the available supply on exchanges and generally leads to higher prices because it shows that investors are preparing for long-term gains rather than short-term speculation. The indicator peaked at the end of the 2022 bear market during a period of heightened fear and uncertainty. The current market conditions show a similar trend. Despite recent market volatility and BTC’s struggle to maintain the $100,000 mark, continued outflows from exchanges suggest that investors are once again starting to hoard Bitcoin. Analysts believe that as exchange reserves steadily decrease, potential upward momentum is building, as these assets are likely not to enter the market for a long time, providing support for the bullish outlook in the next few years. (Bitcoinist)