Bitcoin exchange outflows as well as inflows will continue to provide insight into the activities of investors with their bitcoins. They usually move in line with a market trend, either bullish or bearish. However they can change if the market changes. With the market recovering from another rally, the net exchange flows show a positive picture. Because bitcoin outflows still dominate this area.
Bitcoin outflows rise
Bitcoin’s price has been in an upward trend over the last week. After a Monday-led recovery, bitcoin’s price reached $47,000 on Tuesday. This was the third consecutive month of the asset surpassing that mark. Since then, speculations over how long this recovery will last have been rife. Investors will therefore look at metrics such as exchange outflows and inflows to see if they are selling or buying.
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The numbers for bitcoin have been encouraging towards a steady rally. On-chain data revealed that outflows continue to exceed inflows by large amounts. Glassnode Alerts released a report showing that inflows had been at $7.9B for the last week. However, $9.5B worth of bitcoin was leaving central exchanges. The net result was a negative flow of $1.5 billion.
🚨Weekly On-Chain Flow🚨#Bitcoin $BTC
➡️In: $7.9B
⬅️Get $9.5B Out
📉 Net flow: -$1.5B#Ethereum $ETH
➡️Invoice: $5.1B
⬅️$6.8B
📉 Net flow: -$1.7B#Tether (ERC20) $USDT
➡️Invoices of $4.9B
⬅️Outgoings: $4.4B
📈 Net flow: +$451.8Mhttps://t.co/dk2HbGwhVw— glassnode alerts (@glassnodealerts) April 4, 2022
This data suggests investors are purchasing less, despite selling more. Due to the high volume of coins leaving the exchanges it can be expected that investors would rather accumulate than sell their coins. Since more BTC has been removed from exchanges that is being sold, it is expected there will be less open market supply, which means that there are fewer coins available to satisfy demand.
Tether has better Metrics
Bitcoin’s net flows are not the only thing that suggests that the rally is just in its beginning stages. Tether (USDT), which is the most popular cryptocurrency to pair with bitcoin, has now become the dominant currency. This usually provides a direct correlation with how investors are moving their Tether in and out of the exchanges to bitcoin’s price.
BTC falls to $46K | Source: BTCUSD on TradingView.com
The last week has been Tether inflowsIt had also increased. Inflows totalling $4.4 Billion were reported, while $4.9 Billion Tether was moved to the exchanges. These volumes are believed to be for purchasing bitcoin and other cryptocurrencies.
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There is significant buying pressure on the market, despite the increasing outflows from bitcoin exchanges. With the bitcoin accumulation trend, this could be the beginning of a rally.
Featured image taken from TradingView.com. Chart by The Financial Commission.