According to on-chain data, Bitcoin inflows have risen from whales who hold between 1k-10k BTC. This is a warning sign that could indicate a decline in the value of crypto.
Bitcoin Exchange Inflows Rise Following Rally Over $24k
A CryptoQuant post pointed out that BTC whales with 1k-10k BTC appear to have recently sent large amounts of BTC to exchanges.
The “exchange inflow” is an indicator that measures the total amount of Bitcoin being transferred to wallets of all centralized exchanges (both spot and derivatives).
If this currency’s value spikes, that means large amounts of bitcoins are being sent to the exchanges. The price of Bitcoin can fall depending on how many coins are moving to spot exchanges. This is because investors typically send money to these exchanges in order to sell.
Low values for the indicator indicate that the market is not selling at this time. This trend is neutral, or it can indicate a bullish change in the value of the coin.
Here’s a chart showing the Bitcoin exchange inflows trends over the past few days.
Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the Bitcoin exchanges’ inflows over the past few days have been large. This spike occurred shortly after BTC prices soared to above $24k.
The chart actually shows a modified version of the indicator, called the “exchange inflow – spent output value bands,” which tells us what contribution to the total inflows is coming from each of the different sized holders in the market.
Investors holding between 1k and 10k BTC have shown a significant movement to exchanges over the past two days. These holders are called whales and their current trends could suggest that they may be selling right now.
The indicator, however, takes into consideration inflows to both derivatives and spot exchanges, just as we mentioned. The derivatives exchanges accounted for a large portion of all the inflows. This suggests that whales could have hedged against spot positions.
The spot exchanges received a large portion of inflows. Therefore, some sellers may still be active in this market.
BTC price
At the time of writing, Bitcoin’s price floats around $23.8k, up 2% in the past week.
The crypto market has seen a decline in value over the past 24 hours. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
The featured image is by Thomas Bonometti at Unsplash.com. Also charts from TradingView.com. CryptoQuant.com.