• On-chain data shows that Bitcoin spot and derivative exchange reserves have both risen recently, which could be a sign of bearishness in the market.
• The „exchange reserve“ is an indicator that measures the total amount of Bitcoin that investors are depositing into wallets of centralized exchanges right now.
• In a recent CryptoQuant post, it was pointed out that the open interest and the funding rates are also heating up in the BTC market.
The recent increase in Bitcoin’s spot and derivative exchange reserves is a sign that the market may be headed for bearishness. On-chain data indicates that investors have been making deposits to these platforms, resulting in a rise in the total amount of Bitcoin held in exchange wallets. This increase in exchange reserves suggests an elevated selling pressure in the spot market, and in the derivative market, it implies an overall increase in volatility.
The “exchange reserve” is an indicator that measures the total amount of Bitcoin that investors are depositing into wallets of centralized exchanges right now. This metric has two versions; one is for the spot exchanges, while the other is for the derivative platforms. Usually, investors deposit to spot exchanges for selling purposes, so an increase in the reserves of these platforms can suggest that selling pressure is rising in the market.
The rise in exchange reserves has been noted by analysts in a CryptoQuant post. In addition to the increase in the exchange reserves, the open interest and the funding rates are also heating up in the BTC market. Open interest indicates the total number of open positions held by traders in a particular market, while the funding rate is the fee charged by traders to maintain their open positions.
The rise in both the spot and derivative exchange reserves, combined with an increase in open interest and funding rates, suggests that the market is becoming increasingly bearish. As such, traders should take caution and be aware of the potential risks associated with the current market conditions.