Bitcoin exchange deposits have dropped 76% since mid-November as selling pressure eases, potentially setting up a relief rally following the Federal Reserve's 25 basis point rate cut announced at this week's Federal Open Market Committee meeting. The cryptocurrency recovered from $80,000 on Nov. 21 to $94,000 before settling near $90,000, up 1% for the week.
What Happened: Exchange Deposits Plummet
CryptoQuant analysts reported Bitcoin deposits into exchanges fell from 88,000 BTC in mid-November to 21,000 BTC currently, with the decline beginning after the asset reached its all-time high of $126,000, according to CryptoPotato.
Large investors reduced their transfers to trading platforms significantly during this period.
The share of total deposits from large players dropped from a 24-hour average high of 47% in mid-November to 21% currently.
Average deposit size decreased 36% over the same timeframe, falling from 1.1 BTC to 0.7 BTC, according to the blockchain analytics firm.
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Why It Matters: Loss Realization Signals
The decline in exchange deposits coincides with substantial loss realization by major market participants.
Large investors and short-term holders realized $646 million in losses approximately one month ago—the largest since July—as Bitcoin first fell below $100,000, with this investor cohort realizing at least $3.2 billion in losses since then.
Short-term holders have been selling at negative profit margins over the past four weeks, with the Spent Output Profit Ratio hovering below 1 and the lowest reading at -7%.
"Historically, selling pressure eases when market participants realize they have incurred heavy losses," CryptoQuant analysts stated.
If current conditions persist, Bitcoin could return to $99,000, the lower band of the Trader On-chain Realized Price range that typically marks resistance during bear cycles.
Other key resistance levels include the one-year moving average at $102,000 and the Trader On-chain Realized Price at $112,000.
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