Bitcoin Recovery Faces Challenges as Exchange Reserves Rise and Spot Demand Turns Negative

On October 19, on-chain data indicates that Bitcoin still shows signs of bottoming out, but the recovery process is uneven. Exchange reserves increased from 2.67 million BTC at the beginning of October to 2.68 million BTC. Although this is below January levels, the rise in reserves does not necessarily indicate an increase in selling pressure and may be related to changes in custody methods. The spot demand indicator turned negative again after approaching zero on the 30-day mark, while perpetual contract demand remains positive, providing support for overall demand. The group holding between 100 and 1,000 BTC has net increased their holdings over the past 60 days, but the increase is lower than the peak seen in late September; the net position of those holding between 1,000 and 10,000 BTC has narrowed its decline to nearly zero, while those holding over 10,000 BTC are still in a net reduction state, indicating that the increase in holdings has not yet widely spread. Low exchange reserves and continued accumulation by some whales may support Bitcoin's bottoming process, but for a sustainable recovery, spot demand needs to turn positive continuously, buying pressure must absorb BTC flowing back into exchanges, and accumulation behavior must extend to more holding groups. Additionally, market expectations stemming from the U.S. midterm elections and monetary policy need to translate into actual buying pressure.

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