Bitcoin Exchange Inflows Rise, Is It Bearish?

On-chain data shows that bitcoin exchange flows towards Binance have increased over the course of the past day, which could be a bearish factor for the price.

Bitcoin Exchanges Record Huge Increase in Inflows

As an analyst at CryptoQuant mentioned in the post, a whale has deposited a large sum of money into the cryptocurrency exchange Binance. The relevant indicator here is “exchange inflow”, which measures the total amount of bitcoin that investors send to a specific centralized exchange (which, in this case, is Binance).

When this metric has a high value, it means that holders are accumulating a large amount of money on the platform right now. Investors may have made these transfers for sales-related purposes, depending on the type of exchange these flows are for. Naturally, if this is the case, the inflow may feel a bearish effect on the price.

On the other hand, lower values ​​mean that the exchange in question is not currently receiving as many coins. Such a trend would mean that the selling pressure in the market could reduce.

Now, here is a chart showing the trend in bitcoin exchange flows for cryptocurrency exchange Binance over the past day:

The value of the metric seems to have been quite high in recent hours | Source: CryptoQuant

As shown in the above graph, bitcoin exchange flows for Binance have seen a significant increase in the past few days. With this deposit, approximately 4,451 BTC (worth approximately $133 million at the current exchange rate) entered the platform’s wallet.

Interestingly, this deposit came from a whale who bought 20,000 BTC in the past eight months, meaning that the investor still had over 15,000 BTC left in his wallet after the transaction.

Whales may have made this move to take some profit at the current prices. Since the scale of deposits is quite large, this could potentially create a bearish wave in the market.

However, as in another quantity ExplainedThe deposits are made to the derivatives side of the exchange and not to the spot platform.

Looks like the spot exchanges inflow hasn't moved today | Source: CryptoQuant

It appears that the transfer is not done to sell coins (at least not directly) but to open positions in the derivatives market.

“This category of large wallets rarely goes directly to derivatives exchanges,” says the analyst, noting that the size of the wallet in question is in the 10,000+ BTC range, which is the class of the largest whales on the network.

Such large positions can create volatility in the price of bitcoin, but unlike selling from spot deposits, this price action is not necessarily true for the asset.

btc price

At the time of writing, bitcoin is trading around $29,800, down 3% over the past week.

BTC has gone downhill during the last few days | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com Charts from Tradingview.com Cryptoquant.com