The on-chain data indicates that Bitcoin whales transfer large amounts of Bitcoin to derivatives trading platforms right now. This is an indication that the crypto could face more volatility.
Bitcoin All Derivatives Exchanges Continues to Show High Value
An analyst explained in CryptoQuant that BTC whale activity still appears to be high on derivatives exchanges, as he stated.
The relevant indicator here is the “all exchanges to derivatives exchanges flow,” which measures the total amount of Bitcoin moving from spot exchange wallets to derivatives.
If this metric’s value rises, that means that whales move large amounts of coins into derivatives exchanges.
It is common for this trend to occur around lows of crypto’s price, when whales are looking to buy long positions.
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On the other hand, low values of the indicator show whales aren’t moving much coins to derivatives at the moment. This trend is a long-standing one that has led to highs in coin value.
This chart shows how Bitcoin derivatives have flowed over the years.
Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the Bitcoin spot-to-derivatives flow has risen in recent months, indicating that whale activity may be high at the moment.
The current value is the greatest ever recorded in cryptocurrency history, which means that there are currently a lot of whales using derivatives.
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Historically, the price of the crypto has observed significant volatility whenever the metric’s value has been elevated.
The quant is based on these trends and believes the coin may see additional fluctuations in the future.
Analysts also note that the volume of derivatives all exchanged will have to decrease in order for volatility to stop.
BTC price
At the time of writing, Bitcoin’s price floats around $21.1k, up 4% in the last seven days. The crypto’s value has fallen 27% over the last month.
The chart below shows how the currency’s price has changed over the course of five days.
Over the last few days, the value of crypto appears to have risen. Source: BTCUSD on tradingView| Source: BTCUSD on TradingView
Bitcoin attempted to recover from the lows of $18k and below a week before. So far, the crypto has managed to break above $21k again, but it’s yet unclear whether this recovery will last.
Unsplash.com's featured image. Charts by TradingView.com. CryptoQuant.com chart.