The trend in Bitcoin netflows is shifting again from outflows towards inflows according to on-chain data, which could be a bearish sign for crypto.
Bitcoin Netflow Trend Shifts To Inflows From Flows
The latest Glassnode weekly report shows that BTC netflows moved from an overall trend of net inflows to an increase in net flows.
The “all exchanges netflow” is an indicator that measures the net amount of Bitcoin entering or exiting wallets of all exchanges. The metric’s value is calculated by simply taking the difference between the inflows and the outflows.
If the indicator shows negative value, this means that outflows exceed inflows and BTC is being transferred from exchanges. For accumulation, investors often take their coins out of exchanges. This trend is bullish for crypto.
Positive netflow numbers, on the other hand indicate that there is a net transfer of Bitcoin to exchange wallets. These values could be negative for the coin as holders move crypto to exchanges to withdraw to fiat and to purchase altcoins.
Below is a chart to show the BTC netflow trends over 2021.
Source: The Glassnode Week Onchain (Week 52)| Source: The Glassnode Week Onchain (Week 52)
The graph above shows that netflows oscillate between +5k BTC or -5k BTC throughout the year.
Though there have been some brief periods where the indicator’s value broke out of this range, but overall the trend has been consistent.
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The chart shows that the indicator seems to be shifting back towards inflows after some periods of large outflows.
The report notes that it’s worth keeping an eye on this trend to see if these inflows intensify or rather decline towards the start of the new year.
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BTC’s price could bearish if inflows are sustained for a time. This is similar to May this year.
Bitcoin’s price reached almost $52k yesterday, but has since declined again. At the time of writing the crypto’s price floats around $49.2k, up 0.5% in the last seven days. In the past 30 days, the value of the crypto has fallen 9%.
Below is a chart showing the change in BTC’s price over the past five days.
BTC price appears to have fallen in the past 24hrs | Source: BTCUSD on TradingView
Unsplash.com's featured image. Charts by TradingView.com. Glassnode.com's charts.