Bitcoin now stands at above $20k, following a strong uptrend the previous day. But can this trend be sustained? Here’s what on-chain data has to say about it.
After the price rise, netflows to all Bitcoin exchanges remain muted
In a CryptoQuant article, an analyst explained that netflows from the BTC cryptocurrency exchange can tell us if the current uptrend in short-term Bitcoin is durable.
The “all exchanges netflow” is an indicator that measures the net amount of Bitcoin entering or exiting wallets of all centralized exchanges. The metric’s value is simply calculated by taking the difference between the inflows and the outflows.
If the indicator is positive, this means that investors have been depositing more coins into exchanges. This trend may have negative implications for the cryptocurrency’s price, as these crypto-holders could be selling their coins to the exchanges.
Conversely, negative netflow numbers indicate outflows that are overtaking inflows. If this trend continues for a long time, it can be positive for the coin because it might be a sign that holders are accumulating.
Below is a chart that illustrates the Bitcoin exchange netflow trends over the past couple weeks.
The value of this metric seems to have risen about a week earlier. Source: CryptoQuant| Source: CryptoQuant
As you can see in the above graph, only the positive scale of the Bitcoin exchange netflow is displayed, as it’s a sufficient enough metric in the context of the current price discussion.
Since the cryptocurrency observed the pump, there has not been any significant rises in indicator value. This means that whales haven’t deposited any coins for dumping yet.
A week ago, BTC experienced a significant positive netflow spike. Shortly after, it began to decline.
For now, Bitcoin hasn’t seen any such inflows, which would suggest the rise could continue in the short term. But, we don’t know how much longer the whales will remain seated.
BTC price
At the time of writing, Bitcoin’s price floats around $20.5k, up 7% in the last seven days. In the last month, crypto’s value has risen by 9%.
The chart below shows how the currency’s price has changed over the course of five days.
Over the last 24 hours, the value of crypto appears to have risen sharply | Source: BTCUSD on TradingView
Jievani Sheerasinghe featured image on Unsplash.com. Also charts from TradingView.com. CryptoQuant.com.
