Journalist
Posted:
- Compared to other countries, BTC deposits on US exchanges have increased.
- BTC touched $38,000, showing prospects of reaching $40,000 before 2023 closes.
Changpeng Zhao (CZ) steps down from the helm of affairs at Binance may not be bad for Bitcoin [BTC] based on the movement of one metric.
When CZ resigned, many market parties expected this BTC price are having a serious nosedive. Although the coin fell below $36,000, it recovered within a short time.
Unknown to many, this incident could play a major role in Bitcoin’s quest for greater upside. This inference was due to the US versus offshore Exchange Reserve Ratio.
This on-chain metric tells us the ratio between the number of Bitcoins listed on US and foreign exchanges.
Not every departure is bad
When the US vs. offshore Exchange Reserve Ratio increases, it means that the number of Bitcoin deposits on exchanges increases compared to the other party. If the benchmark decreases, it implies something else.
On November 21, the benchmark was -0.46. But at the time of writing, it had risen to -0.44, according to AMBCrypto’s analysis of CryptoQuant data.
Source: CryptoQuant
In previous cycles, Bitcoin supply rose on US exchanges before a bull run occurred. When the bull run starts, the supply on these exchanges drops. So it’s likely that we’re seeing history repeat itself.
Crypto sunmoon, a Korean on-chain analyst and author of Crypto Quant, also supported this, saying:
“If the recent CZ and Binance regulations lead to an increase in the percentage of bitcoin held on US exchanges, we will be ready for the next bull market.”
Before the metric jump, there was speculation that the US government was looking to reduce Binance dominance in the country. So it should come as no surprise that deposits in stock exchanges in the country have increased.
Eyes on $40,000
Moreover, BTC already showed signs that it could be poised for a rally when its price surpassed $38,000 on November 24. The increasing market share of the US stock markets was also confirmed by the Korean Premium Index.
The Korean Premium Index shows the gap between Korean stock exchanges and other stock exchanges. At the time of writing, the benchmark was declining, partly due to fewer deposits by private investors.
Source: CryptoQuant
As the Table of contents had risen, this would have implied strong buying pressure from Asia. However, that was not the case. For the time being, the BTC Open Interest is increasing.
Open Interest shows the amount associated with the open futures contracts in the market.
When Open Interest is low, it means traders are closing their positions. But when it is increasing As it was at the time of writing, this indicates an increase in the number of open contracts.
Source: Coinglass
Read Bitcoins [BTC] Price prediction 2023-2024
In terms of price action, rising Open Interest alongside increasing value implies that BTC has the potential for another collection.
Some traders are even targeting a $40,000 milestone for the coin before the year ends.