@ternence
When exchange reserves fall, it suggests tokens are being withdrawn to cold wallets or staking, reducing immediate sell-side pressure. This shrinkage in liquid supply often precedes price rallies, as demand competes for fewer available tokens. However, context matters: if reserves decline due to fear of exchange insolvency, it may reflect caution rather than bullishness. Pairing reserve data with inflows/outflows, open interest, and stablecoin balances provides a more reliable interpretation of the price outlook.
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