On Wednesday, Sept. 11, 2023, Bitcoin price wavered as traders reflected on the debate between Donald Trump and Kamala Harris.
Bitcoin Reserves Decline
Bitcoin retreated to $56,700 from this week's high of $58,000, while Trump-themed tokens like MAGA fell by over 10% in the last 24 hours. The Kamala Harris token also declined slightly as traders estimated that Harris had a better performance. Polymarket's odds flipped in her favor, with a 50% chance of winning in November. Meanwhile, spot Bitcoin ETFs have seen inflows for the last two consecutive days, adding $116 million on Sept. 10 and $28 million a day earlier. Another potential catalyst for Bitcoin is that reserves on exchanges have continued to fall. Data from CoinGlass shows that these reserves dropped to 2.35 million, the lowest level in years, significantly lower than the year-to-date high of over 2.71 million.
Stablecoin Volume Increases
Falling Bitcoin reserves are a positive metric because they indicate that many holders are not selling. Recently, reserves rose in July and early August as the German government and Mt. Gox liquidated their holdings. Falling BTC reserves are happening as the volume of stablecoins in reserves moves upward. Tether’s market cap has risen to over $118 billion, while USD Coin jumped to a record high of $35.2 billion. A combination of falling Bitcoin reserves and rising stablecoin amounts is a sign that investors are waiting to buy.
Bitcoin Technical Risks
Still, Bitcoin faces some major risks ahead. The most important risk is that the spread between the 50-day and 200-day Exponential Moving Averages has continued to narrow, meaning that a death cross may happen. Historically, financial assets tend to dive sharply when this pattern happens. In Bitcoin’s case, the last death cross led to a 65% dive in 2022. Bitcoin also faces a major resistance, which is shown in the descending trendline that connects the highest swings since March this year. For a clear bullish breakout to happen, it will need to clear that resistance and the year-to-date high of $73,800.
The Bitcoin market situation remains ambiguous. Declining reserves and rising stablecoin volumes indicate investors' readiness to buy, but significant technical risks remain that could impact future price movements.
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