Crypto News

Whale Inflows Into Bitcoin Exchanges Slow Down; Is a Recovery Ahead?

Whales, a class of investors/traders that hold a large amount of Bitcoin tokens, have lately stopped depositing capital into crypto exchanges.

Data fetched by blockchain analysis firm CryptoQuant shows inflows into the world’s major trading platforms started plummeting at a considerable pace beginning September 16. The trend pointed to a surge in the so-called HODLING sentiment, which means wealthy traders preferred to hold Bitcoin instead of trading them for other assets.

“Fortunately, whale inflows seem to be decreasing,” tweeted Ki-Young Ju, the CEO of CryptoQuant. “It seems the BTC price follows the traditional market lately. I think the only thing we can do with on-chain data at this moment is to watch whale moving. Most of the fundamental on-chain indicators are healthy.

Road to Bitcoin Recovery

Observers believe that whales play a significant role in determining Bitcoin’s market trends. The cryptocurrency risks plunging upon noting large capital inflows into exchanges. On the other hand, a drop in deposits removes the psychological selling pressure off Bitcoin.

Mr. Ju predicted the said correlation before the Bitcoin’s drop below $10,300 this Wednesday. On September 21, he envisioned a short-term price correction for the cryptocurrency based on a jump in whale activity. The BTC/USD corrected later, crashing by as much as 7.81 percent from its local top near $10,990.

bitcoin, btcusd, btcusdt, xbtusd, cryptocurrency, Euro, EURUSD, cryptocurrency, bitcoin whales

Exchange Whale Ratio showing the correlation between BTC deposits and its price. Source: CryptoQuant

Other Bitcoin fractals from recent history also show whales-led market trends. On March 8, for instance, CryptoQuant connected the Bitcoin price’s 50 percent decline with the inflow of 6,000 BTC across multiple exchanges.

Today is different. Bitcoin whales are showing signs of accumulation as BTC/USD trades near $10,300. A chart published by on-chain data tracker WhaleMap noted a cluster is forming near the level; it represents an increase in the locations of unspent Bitcoin. Analysts explained:

“Bubbles show locations where unspent bitcoins were accumulated. The larger the bubble, the more unspent bitcoins are located there. P.s. Unspent means these bitcoins have not been moved since they were ‘inflowed’ to a whale wallet.”

Bitcoin, cryptocurrency, btcusd, btcusdt, xbtusd

Bubble shows locations of unspent BTC. Source: WhaleMap

Combining the WhaleMap readings with that of CryptoQuant, it appears Bitcoin may recover part of its recent losses in the coming sessions.

Market Risks

Short-term sentiments–even the bullish ones–can flip without breaking a sweat as long as Bitcoin trades under the influence of macroeconomic fundamentals. As Mr. Ju pointed out, the cryptocurrency is closely following the day-to-day trends in the traditional markets that may strengthen whales’ bearish bias.

One of the main reasons behind a potential Bitcoin downside is a stronger US dollar. Traders/investors lately raised their bids for the greenback as the US Congress failed to finalize the second coronavirus relief bill. That left risk-on assets, including US equities and gold, under bearish stress.

Bitcoin, cryptocurrency, btcusd, btcusdt, xbtusd

BTCUSD is growing weaker in the wake of the US dollar’s rebound. Source: TradingView.com

Economists believe that the financial aid from the US government won’t arrive until November’s presidential election. That expects to give the US dollar more room to rebound while improving Bitcoin’s short-term bearish bias further.

How useful was this post?

Click on a star to rate it!

As you found this post useful...

Follow us on social media!

0 Comments
Inline Feedbacks
View all comments

Related Crypto News

Cryptocurrency Exchange Operator Diginex Begins Trading on Nasdaq
Cryptocurrency exchange operator Diginex has announced the start of its listing and trading on Nasdaq. Digital assets financial services...
Why reduced Bitcoin futures volume may signal the start of a new bull trend
Volume and open interest in Bitcoin futures have been in a steady decline, but this could help catalyze the...
Bitcoin Has Yet to Break Key Resistance Despite Strong Monthly Close
Bitcoin is currently posting a somewhat weak attempt to shatter the resistance laced throughout the upper-$10,000 region A break...
Yearn.finance (YFI) Posts Massive Short Squeeze Following Surge in Open Interest
Yearn.finance (YFI) has been facing heightened volatility as of late, with bears attempting to capitalize on recent drama surrounding...
Bitcoin Posts a 66-Day Consecutive Streak Above the $10K Price Range
The Bitcoin network has achieved a few new milestones during the last week, as the price has remained above...
BitMex denies CFTC and DoJ allegations, says trading will continue
Despite criminal charges from the DOJ and at least one arrest of its leadership, Bitmex promises to continue operating...

Featured Crypto News

A Lifelong US Dollar Downtrend Paints Bullish Outlook for Bitcoin
The US dollar is on track for its most significant monthly performance since July 2019. But it continues to...
Chainlink up 30% following six-week downtrend and developer selloff
A Chainlink developer address appears to have been offloading tokens and putting downward pressure on prices. But things are...
The Pivotal Bitcoin Level Analysts Are Watching as End of September Nears
It’s been quite a boring month for Bitcoin. After plunging around $2,000 at the start of the month, the...
Uniswap’s UNI Token Could Rocket Past $6.00 as Bulls Defend Crucial Support
UNI – the governance token of the Uniswap platform – has been seeing some immense turbulence in the time...
100M people worldwide now use crypto-based assets, says Cambridge study
Skyrocketing figures show crypto’s growing global dominance.Skyrocketing figures show crypto’s growing global dominance Researchers at the Cambridge Centre for...
Why Top Global Brands Like the NBA and UFC Choose Dapper Labs’ Flow Blockchain
Developed by the team behind some of the most successful crypto applications in the world, Flow is a blockchain...