Bitcoin Surges 13% as Institutional Buying and Declining Exchange Reserves Fuel Rally
1min read Bitcoin has seen a 13% increase over the past month, although it continues to trade below $100,000. This rise has been driven by several bullish indicators that suggest the cryptocurrency could reclaim its previous highs. One of the key factors is the consistent buying activity by institutional investors, which has been recorded over the past few weeks. This trend is supported by market indicators showing that Bitcoin’s availability on exchanges is shrinking, while accumulation has surged simultaneously.
The Exchange Reserve, which represents the amount of an asset held on centralized exchanges, has been declining. This decline often signals increased buying activity by investors, as they move assets into private wallets for long-term holding or transfer them to new custody solutions. At the time of writing, only 2.47 million BTC remain on crypto exchanges, reflecting a shift in the market’s long-term outlook. This declining Exchange Reserve has closely aligned with a surge in institutional Bitcoin purchases, with traditional investors steadily accumulating Bitcoin since April, except for a single day in late April when they sold $56 million worth of BTC. However, the amount of Bitcoin sold remains significantly low compared to the total volume bought, with $4.49 billion worth of Bitcoin purchased during the same period. If this significant buying pressure continues to build, Bitcoin maintains a strong chance of crossing into the $100,000 region.
Another bullish indicator is the Market Value to Realized Value (MVRV) metric, which measures whether an asset is overvalued or undervalued based on the ratio between market value and the price at which each unit last moved. At press time, Bitcoin’s MVRV sat at 2.1, indicating the market still holds significant room to trend higher. Bitcoin is expected to maintain its upward trajectory until it approaches the 3.7 MVRV region, a level that often signals a market peak. Meanwhile, high-liquidity investors, or whales, are already accumulating Bitcoin, as indicated by the Spot Average Order Size metric. This metric helps determine who is driving purchases—whether it’s retail traders or whales—and provides insight into the size of whale orders. Notably, large buy orders from whales are present in the market, indicating that this cohort has resumed accumulation.
These four metrics—declining Exchange Reserves, strong ETF inflows, a moderate MVRV ratio, and renewed whale activity—suggest Bitcoin is on track to reclaim the $100,000 region in May. The consistent buying activity by institutional investors, the shrinking availability of Bitcoin on exchanges, and the renewed accumulation by whales all point to a bullish outlook for the cryptocurrency. If these trends persist, Bitcoin could see a sustained rally, potentially reaching its previous highs and beyond.
