Data from on-chain shows that some Bitcoin supply has been redirected to exchanges. This may be a bearish sign for crypto’s future price.
Bitcoin Exchange Inflow Has Stopped in Recent Days
A CryptoQuant analyst noted that coins from the 2y-3y range and 3y-5y range were recently transferred to exchanges.
The “exchange inflow” is an indicator that measures the total amount of Bitcoin being transferred into the wallets of all centralized exchanges.
This metric has a high value, which means that investors deposit large sums to the exchanges. This can lead to a decline in the price of crypto if it continues for a long time.
A modified version of this indicator is the exchange inflow “Spent Output Age Bands” (SOAB), which tells us about the individual contribution to the total inflows from the different supply groups in the market.
The time that their coins sit still is what separates these cohorts. The relevant age bands here are “2y-3y” and “3y-5y”; the below chart shows the trend in the exchange inflows coming from these supplies:
This seems to indicate that the value of these cohorts' metric has increased in recent days. Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the Bitcoin inflow SOAB spiked for the coin groups in the past few days.
Some investors were able to deposit large quantities of coins aged 2 to 3 and 5 years, respectively.
Such old supply is called the “long-term holder” supply. It is generally believed that coins older than 50 years are less likely to be moved at any time.
Therefore, movements in the value of these coins can have noticeable effects on Bitcoin’s price, especially if they are sent to exchanges.
At the time of writing, Bitcoin’s price floats around $19.1k, up 1% in the last seven days. In the past month, crypto lost 1%.
Below is a chart showing the change in coin price over the past five days.
It seems that the value of crypto appears to have recovered from its plunge a few days back | Source: BTCUSD on TradingView
The price of Bitcoin continues to trend stale in the last week, with the cryptocurrency mostly staying around $19k. Two days or so ago BTC did make an attempt to break the monotony by plunging below to $18.7k, but it wasn’t long before the coin was back at $19k.
Image by Max Saeling, Charts from TradingView.com and CryptoQuant.com.