Bitcoin Exchange Outflows Spike, Bullish Sign?
April 21 2023 - 09:00AM
NEWSBTC
On-chain data shows the Bitcoin exchange outflows have seen a
significant spike during the past day, a sign that may be bullish
for the price. Bitcoin Exchange Outflows Have Observed A Large
Spike Today As pointed out by an analyst in a CryptoQuant post, a
total of 2,138 BTC has been taken out of exchanges during the last
day. The “exchange outflow” is an indicator that measures the total
amount of Bitcoin that’s being withdrawn from the wallets of all
centralized exchanges. When the value of this metric has an
elevated value, it means the investors are transferring out a large
number of coins from these platforms. Generally, holders withdraw
their BTC from exchanges for holding onto them for extended periods
in offsite wallets. Because of this reason, elevated values of this
metric can be a sign of accumulation, and hence, can be bullish for
the cryptocurrency’s price. On the other hand, the low values of
the indicator imply there aren’t many withdrawals happening in the
market right now. Such a trend can be either bearish or neutral for
the asset, depending on how the “exchange inflow,” the counterpart
indicator, is behaving at the moment. Holders usually deposit to
exchanges for selling-related purposes, so when the exchange inflow
has high values, it suggests the investors may be participating in
a selloff of the asset. Naturally, this can have bearish
consequences for the price. Related Reading: Bitcoin Bearish
Signal: Supply Older Than 7 Years On The Move Now, here is a chart
that shows the trend in the Bitcoin exchange outflow, as well as in
the inflow, over the last day: The value of the outflow seems to
have been quite high in recent hours | Source: CryptoQuant As
displayed in the above graph, the Bitcoin exchange outflow has
registered a very sharp spike in the last few hours. In total, the
investors have withdrawn 2,138 BTC (about $60.6 million at the
current exchange rate) from exchanges with this spike. Since these
large withdrawals have come while the price of the cryptocurrency
has been in the lower $28,000 values (which are relatively low
levels considering the price had been above $30,000 just a few days
ago), it’s possible that these transfers out of exchanges are a
sign of fresh buying taking place in the market. From the chart,
it’s also visible that the exchange inflows have remained at low
values at the same time, meaning that there aren’t any deposits
happening to counteract these withdrawals. This may imply that
there isn’t any additional appetite for selling at the current
levels for now. Related Reading: Quant Explains Bitcoin Funding
Rates Pattern That Precedes Uptrends This fresh unimpeded Bitcoin
accumulation can be a positive sign for the market, as it means
that there are at least some large investors in the sector who view
the current prices as a discounted buying opportunity, and not as a
sign of more decline to come. BTC Price At the time of writing,
Bitcoin is trading around $28,000, down 9% in the last week. Looks
like the value of the asset has been plunging in the last few days
| Source: BTCUSD on TradingView Featured image from Dmitry Demidko
on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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