According to data from the Bitcoin Exchange Whale ratio, it has been rising. It suggests that an imminent dump may be in store.
Bitcoin Whales now account for 90% of inflow to exchanges
A CryptoQuant posting pointed out that the exchange whale ratio is above 0.9. This suggests that there may be dumping in the market.
The “exchange whale ratio” is an indicator that measures the ratio between the total Bitcoin amount of top 10 transactions to exchanges and the total inflows.
The metric shows us, in simpler terms: how do the 10 largest transactions to exchanges stack up against the total coins moved to exchanges.
The indicator will show a value of 0.85 if it is below that. This means the 10 largest transactions to the exchanges, which are thought to be owned by whales, account for less than 85%. This has been historically healthy for Bitcoin.
However, if the metric is high, then it means that the top 10 transactions account for the majority of inflows into exchanges.
For selling, investors usually transfer their Bitcoins to exchanges. As a result, it is possible that the whales are dumping huge amounts of bitcoins to exchanges.
Year 2021 Data Cements Bitcoin As Risk-On Asset| Year 2021 Data Cements Bitcoin As Risk-On Asset
Here’s a chart showing the BTC/USD exchange whale ratio for the last few months.
Source: CryptoQuant| Source: CryptoQuant
You can see that the Bitcoin exchange whale ratio is now higher than 0.9, as you can see from the graph. The top 10 transactions account for over 90% of all inflows.
The chart illustrates that when the indicator is at its highest value, it has been a short while before the coin’s price has fallen.
Similar Reading: Why did China ban Bitcoin mining?| Why Did China Ban Bitcoin Mining? These are the Seven Top Theories
The current high exchange ratio values could also be bearish on Bitcoin’s price.
At the time of writing, Bitcoin’s price floats around $47.3k, down 7% in the last seven days, Over the past month, the crypto has lost 16% in value.
Below is a chart showing the change in coin price over the past five days.
BTC price appears to be consolidating once again. Source: BTCUSD on tradingView| Source: BTCUSD on TradingView
Bitcoin seemed to finally have broken free from consolidation a while back but now the price has fallen to the $45k-50k range. It’s unclear at the moment when the coin may beat this stagnation, or which direction it may break in.
If the current exchange whale ratio is any indication, then there could be a further decline in BTC’s price.
Featured image taken from Unsplash.com. Charts from TradignView.com and CryptoQuant.com.