The Bitcoin outflows spiked sharply according to on-chain data, suggesting that whales are buying the drop down to $39k.
Bitcoin Exchange Outflows Show High Valuation, Indicating Whale Activity
An analyst pointed out in a CryptoQuant article that BTC outflows had seen a significant spike.
The “exchange outflows” is an indicator that measures the total amount of Bitcoin currently exiting wallets of all exchanges.
Investors are likely to withdraw large amounts of money at this time if the indicator’s value is high. A large value can indicate whales bought.
This trend can be bullish for cryptocurrency’s price if it is sustained. Investors usually move their crypto out exchanges in order to build wealth.
On the other hand, low outflow values suggest there isn’t much buying going in the market right now. It could be either neutral or bearish for the market.
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Below is a chart showing how BTC outflows have changed over the past 12 months.
Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the Bitcoin outflow has been a significant value in recent months as it has fallen below $40k.
The possibility that whales jumped at the chance to collect more coins is suggested by this. The price of Bitcoin saw a slight uplift in January, following similar outflows.
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Now it remains to see if there will be a bullish effect this time, or if sellers will overpower the buyers further lowering the price.
BTC Prices
At the time of writing, Bitcoin’s price floats around $39.2k, down 5% in the last seven days. In the last month, crypto lost 4%.
Below is a chart showing the change in coin price over the past five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Bitcoin fell below the $39k mark after more than a month of holding it above that level. It is the continuation of the fall that began last month, when BTC reached $47k.
Currently, it’s unclear when the price may observe some recovery. If the outflows prove anything, signs could be bullish for crypto.
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts