Bitcoin’s 

BTC

$20,713

 ongoing price rally above $64,000 has coincided with a substantial drop in its reserves across all exchanges.

According to data provided by CryptoQuant — a South Korea-based blockchain analytics service — the amount of Bitcoin held in exchanges’ wallets dropped to as low as 2.379 million BTC earlier this week, the lowest in more than three years. Currently, the reserves are around 2.38 million BTC.

CryptoQuant noted that the declining Bitcoin reserves showed the availability of fewer BTC tokens “for selling, altcoins purchasing, and margin trading.” Additionally, that also reflected traders’ intention to “hodl” the cryptocurrency.

Demand for Bitcoin grows among whales and fishes

On the other hand, the cryptocurrency’s demand appears to have been increasing across retail and institutional traders, with the number of wallets holding more than $100 and $10 million worth of BTC reaching their record high of 16.67 million and 10,510, respectively.

On-chain analyst Willy Woo published a report in August 2021 that discussed Bitcoin’s “supply shock” against its rising demand, concluding that the cryptocurrency’s per-token worth should be at least $55,000. 

The “conservative” target remained lower than pseudonymous analyst PlanB’s $135,000 price projection by the end of 2021, based on his stock-to-flow model.

Meanwhile, PlanB’s Bitcoin price prediction for November 2021 sits around $98,000, above $70,000, the most preferred strike target for the options expiring on Nov. 26, as shown in the chart below.

BTC price macro fundamentals

Bitcoin’s bullish on-chain fundamentals are likely to see further strength from Wall Street adoption. 

On Tuesday, ProShares became the first exchange-traded product firm to launch a Bitcoin futures-based exchange-traded fund (ETF) on the New York Stock Exchange. In a milestone for Bitcoin investing opportunities, the listing opened a new road for institutional investors to gain exposure to BTC.

For instance, Fundstrat Global Advisors co-founder Tom Lee said he anticipated Bitcoin ETFs to attract at least $50 billion in the coming 12 months, reasserting his team’s year-end $100,000 price target for BTC.

Technically, Bitcoin appeared to be heading toward its record high near $65,000, now acting as a resistance level.

On the flip side, Bitcoin’s relative strength index (RSI), a momentum indicator that analyzes an asset’s overbought/oversold signals, reported the cryptocurrency price as excessively high on the daily candle chart, suggesting that a pullback is on the table. 

Related: Bitcoin sees its highest ever daily close as BTC/Euro pair hits all-time highs

Should a correction happen, Bitcoin’s next support target could be near $57,500, which serves as the 78.6% Fib level of the Fibonacci retracement graph, drawn between the $65,000 swing high and the $30,000 swing low.

The level also coincides with Bitcoin’s 20-day exponential moving average (the green wave in the chart above). The said level has earlier acted as strong support during Bitcoin’s uptrend. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.