Bitcoin price movements can often be forecasted by tracking changes in exchange reserves—the amount of BTC held on trading platforms. When reserves drop, it typically signals investors are withdrawing BTC to hold long-term, reducing supply and potentially driving prices up. Conversely, rising reserves suggest more BTC is being deposited for selling, increasing supply and possibly pushing prices down. By monitoring reserve data from sources like Glassnode or CryptoQuant, traders can spot trends early. For instance, a sharp decline in reserves preceded Bitcoin’s 2020 bull run. Combining this with on-chain metrics like transaction volume or whale activity enhances accuracy. While not foolproof—external factors like market sentiment also matter—exchange reserve analysis offers a powerful tool for predicting Bitcoin’s price trajectory.