Now that Bitcoin traders are starting to sync with their Wall Street counterparts, there are a few reasons why they may extend the bullish rally that has been experienced since April. Now that the highly psychological $10K price level is once again possible, cryptocurrency investors will likely ride the positive sentiment in Wall Street as the George Floyd protests turn peaceful and business activity resumes in the midst of the coronavirus pandemic. Something else that Bitcoin traders will be looking into is the issue of reserves, and this could result in a stronger rally.

Cryptocurrency exchange platforms that offer Bitcoin trading can only operate with a certain amount of tokens in their currency reserves; the level is mostly provided by traders and account holders, which means that the most popular and active exchanges are expected to hold the largest reserves. In the case of Coinbase, however, quite a few account holders cashed out on June 6 following an ominous report involving extreme Know Your Customer (KYC) measures.

Coinbase Analytics, a specialized data science division of the Coinbase cryptocurrency empire, is apparently being offered to the United States Internal Revenue Service and the Drug Enforcement Agency. This announcement caused a stir among Coinbase account holders and traders, many of whom decided to transfer their digital currency tokens elsewhere. With this newly diminished reserve capital, demand is likely to increase; this is a basic fundamental signal, but there is something else for analysts to consider.

In the past, Bitcoin holders who disconnect their wallets from cryptocurrency exchanges have done so for a while. What this suggests is that many traders are exercising more conservative money management, and they may be reluctant to sell their tokens for the time being. As of June 6, Bitcoin reserves at Coinbase had fallen to their lowest levels in 12 months. When we look at what happened last year when Bitcoin hit a record low $4,000 price in 2019, token reserves were quite high until a bullish rally unfolded over a few months, eventually hitting a high around $14,000, at which point exchanges experienced a period of low reserves.