On-chain data shows exchanges have been observing recent growth in their Bitcoin reserves, a sign that selling pressure may be increasing.

As an analyst in a CryptoQuant post pointed out, only Coinbase has seen some withdrawals recently. The relevant indicator here is the “exchange reserve,” which measures the total amount of Bitcoin currently being held in the wallets of any centralized exchange.

When the value of this metric goes up for an exchange, it means the platform is receiving a net amount of deposits right now. Since one of the main reasons investors transfer their coins to exchanges is for selling purposes, this trend can have bearish consequences for the asset’s price.

On the other hand, a decline in the indicator implies a net number of coins is leaving the exchange currently. When prolonged, such a trend can be a sign that investors are making withdrawals to accumulate the cryptocurrency, which can be bullish for the value of BTC in the long term.

Now, here is a chart that shows the trend in the Bitcoin exchange reserves of the major platforms in the sector over the last few days:

As displayed in the above graph, the Bitcoin exchange reserve for almost all of these exchanges (Bitfinex, Binance, Kraken, Kucoin) has been trending up in the past few days.

The chart also shows the data for another indicator, all exchange’s netflow, which tells us about the net change in the combined reserve of all the exchanges in the market.

It looked like when the latest surge in the price of the cryptocurrency started, this metric saw a large spike, suggesting that holders rushed to deposit their coins to take advantage of the profit-taking opportunity possibly.

While this positive netflow didn’t immediately translate to the price, the continued flow of smaller deposits that have occurred in the last day or so since then does seem to have produced a noticeable effect on Bitcoin, as the asset has declined below the $25,000 level now.

It’s also possible that some of the earlier large deposits were made in advance, and once the coin touched levels above $26,000, these investors pulled the trigger and dumped their holdings, hence the delay in the price decline.

The cryptocurrency exchange Coinbase, however, is a platform that has seen a net amount of withdrawals in the last few days. This suggests that possible buying has been taking place on the exchange, and indeed, the Coinbase Premium Index may also confirm so.

The Coinbase Premium Index measures the difference between the Bitcoin price listed on Coinbase and that on Binance. From the chart, it’s apparent that this indicator turned very positive recently, which means that BTC had a higher price on Coinbase than on Binance during the spike, suggesting that the platform saw a higher degree of buying pressure.

Some of these coins bought on the exchange ahead of the price surge are now being withdrawn from the platform’s wallets, hence the downtrend in the exchange reserve.

At the time of writing, Bitcoin is trading around $24,200, up 10% in the last week.

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