On-chain data shows the Bitcoin whale exchange inflows have remained down after hitting a local peak a while back, a sign that could prove to be bullish for the price of the crypto.
As pointed out by an analyst in a CryptoQuant post, the BTC inflows made a peak recently and have remained down since, a signal that the bottom may be in for the coin.
The “all exchanges inflow” is an indicator that measures the total amount of Bitcoin being transferred to wallets of all centralized exchanges.
When the value of this metric is elevated, it means a large number of deposits are being made on exchanges right now. Since investors usually send their coins to exchanges for selling purposes, such values of the indicator can be bearish for the price of BTC.
On the other hand, low inflow values suggest a healthy amount of selling may be going on in the market right now. Depending on whether the outflows (the opposite metric) are raised or not, this kind of trend can be either bullish or neutral for the value of the crypto.
Now, here is a chart that shows the trend in the Bitcoin all exchanges inflows over the last few years:
The value of the metric seems to have been low in recent days | Source: CryptoQuant
As you can see in the above graph, the Bitcoin exchange inflows hit a peak a while back, following which the crypto sunk down below $18k.
The chart also includes the data for two other indicators, the “top 10 whale inflows” and the 7-day average of the total inflows.
The former metric gives the sum of the ten largest deposits going to exchanges. These transfers are generally assumed to be from whales, so that this indicator gives us an idea about the current selling behavior of these humongous holders.
It looks like both the whale inflows and the 7-day mean total inflows have made a similar pattern in recent weeks.
Historically, the trend of a sharp inflow spike followed by low values has been a sign of bottom formations for the crypto.
As whales, and other investors as well, aren’t putting too much selling pressure on the market right now, it’s possible that Bitcoin may see a bullish outcome in the coming future.
At the time of writing, Bitcoin’s price floats around $23.2k, down 5% in the past week.
Looks like the value of the crypto has been consolidating sideways recently | Source: CryptoQuant
Featured image from Sandra Seitamaa on Unsplash.com, charts from TradingView.com, CryptoQuant.com