On-chain data suggests the Bitcoin exchange inflows shot up recently, suggesting selling on exchanges may be behind the latest drop in the crypto’s price below $22k.
As pointed out by a CryptoQuant post, whales with 1k to 10k BTC moved a significant number of coins to exchanges recently.
The “exchange inflow” is an indicator that measures the total amount of Bitcoin moving to exchange wallets on any given day.
When the value of this metric is high, it means a large number of coins are being transferred to exchanges right now. If a significant portion of this BTC went to spot exchanges, then such a trend can prove to be bearish for the price of the crypto as investors usually transfer to these exchanges for selling purposes.
On the other hand, low values of the inflow can suggest exchanges are seeing little selling activity right now. This may be either neutral or bullish for the value of the coin.
A modified version of the inflow highlights the individual contribution to the total inflows from the different sized retail investors as well as whales in the market. Here is a chart specifically for the holder groups of 100-1k BTC, 1k-10k BTC, and above 10k BTC:
As you can see in the above graph, the Bitcoin all exchanges inflow observed a sharp spike just a couple of days back.
It seems like the heaviest contribution to this spike came from whales with wallet balances lying in the 1k to 10k BTC range.
If a large part of these inflows indeed went to spot exchanges, then the latest plunge in the price of the crypto may have been triggered by the dumping from these whales.
At the time of writing, Bitcoin’s price floats around $21.4k, down 10% in the last seven days. Over the past month, the crypto has lost 4% in value.
The below chart shows the trend in the price of the coin over the last five days.
After moving sideways around the $24k mark for a while, Bitcoin seems to have broken out of the consolidation and dropped lower. The crypto has now breached under the $22k level for the first time since more than 20 days ago, and the decline doesn’t look to have stopped yet.