Analysis: Bitcoin exchange reserves are close to their lowest level in nearly 7 years, possibly due to hedge funds buying in at low prices

According to Cointelegraph, data from CryptoQuant shows that as of January 13th, the Bitcoin reserves of all cryptocurrency exchanges have dropped to 2.35 million, a low not seen in nearly seven years since June 2018 (when the trading price of Bitcoin exceeded $7,000). André Dragosch, research director at Bitwise, suggests that the decline in exchange bitcoin supply may be due to continued discount buying by institutional participants.

In a post on January 13th, Dragosch wrote: "The global hedge fund performance relative to Bitcoin's beta coefficient has increased from recent cycle lows. This indicates that market exposure for Bitcoin and other crypto assets is increasing." The decrease in exchange bitcoin supply could potentially signal an upcoming price surge triggered by a "supply shock". Such shocks occur when strong buyer demand meets reduced bitcoin supply leading to an increase in prices.