Long-term crypto holders have seen a large inflow of Bitcoin to exchanges, which could signal a bearish trend for the crypto’s future.
Bitcoin investors who have held the currency for 12 months to 18 months transfer a large amount of bitcoins to exchanges
A CryptoQuant analyst noted that some long-term holders of coins have sent huge inflows to the exchanges over the past year, according to an article.
The relevant indicator here is the “exchange inflow,” which measures the total amount of Bitcoin moving to centralized exchange wallets.
If this indicator’s value shows an astronomical rise, that means investors just transferred a large amount of crypto to the exchanges. This trend can be bearish on the cryptocurrency price as crypto holders typically transfer their coins to exchanges for sale.
On the other hand, small values of the metric may show normal market behavior and that there isn’t largescale dumping going on at the moment.
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The modified Bitcoin exchange inflow chart shows transactions only for those who held their Bitcoins from 12 to 18 months back. This chart shows it.
Source: CryptoQuant| Source: CryptoQuant
The indicator’s value has seen a dramatic increase in recent months, as you can see from the graph. The result is that the indicator’s long-term owners aged between 12 and 18 months may have sold a large number of their coins or transferred them to an exchange.
You can see that the quant is also marking the past times of this trend in the chart. The chart shows that the price fell immediately after such a surge.
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The price of Bitcoin has seen a recent spike, and it may soon experience a similar fall if this pattern holds.
However, in certain cases, it’s also possible the value of the coin doesn’t see any effects from this. If a large outflow occurs soon, this would indicate that the coin’s value is not affected.
BTC price
At the time of writing, Bitcoin’s price floats around $43.3k, up 23% in the last seven days. The crypto’s value has increased 17% over the last month.
The chart below shows how the currency’s price has changed over the course of five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts