News
Lowest exchange flows since 2015
On-chain data shows that Bitcoin exchange inflows hit its lowest level in nearly a decade recently, a sign that could be bullish for the asset.
Bitcoin exchange flows have been declining recently
As pointed out by CryptoQuant author Axel Adler Jr in a publish on X, BTC exchange flows have been falling for some time. O “exchange entry”It is an on-chain indicator that monitors the total amount of Bitcoin that investors deposit into wallets linked to centralized exchanges.
When the value of this metric is high, it means that holders are transferring a large number of coins to these platforms right now. Since one of the main reasons investors may deposit coins into custody of exchanges is for selling purposes, this type of trend could be bearish for the asset.
On the other hand, the low indicator implies that exchanges are not receiving many deposits currently. Depending on the trend in the opposite metric, the exchange exitsuch a trend can be bullish or neutral for the price of the cryptocurrency.
Now, here is a chart showing the trend in Bitcoin inflow over the last decade:
The value of the metric seems to have been going down in recent weeks | Source: @AxelAdlerJr on X
As shown in the chart above, Bitcoin exchange Inflow is trending at 20,000 BTC at the moment, the lowest the market has seen since 2015.
The analyst also attached the indicator’s 365-day moving average (MA) data to the same chart. This line has been declining since February 2018, dropping from 90,000 BTC to 36,000 BTC today.
The decline in exchange inflows may indicate that the appetite for selling the cryptocurrency has decreased. If so, due to the way supply and demand dynamics work, the price could naturally benefit from a bullish effect from this pattern.
However, there may be another explanation for this long-term trend: the fact that exchanges have not played a constant role in the market over these years.
In the 2017 cycle, exchanges were relevant in the market, which is why they actively received large deposits. Still, during the 2021 cycle, new ways of investing in Bitcoin emerged, which may explain why the drop occurred between the two periods.
Today, Bitcoin finds itself at a time when spot exchange-traded funds (ETFs) have gained approval and are attracting considerable demand.
With these ETFs, cryptocurrency exchanges will certainly lose more relevance, so it looks like this cycle will see even fewer deposits than at the time of 2021.
BTC Price
Bitcoin had recovered past $65,000 earlier the previous day, but the asset appears to have fallen as it is now down to $63,100.
Looks like the price of the coin has been heading up over the last few days | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com