Bitrabo Editorial
Bitcoin is showing indications of a potential upward movement with various on-chain metrics turning favorable. These metrics, often reflective of future price trends, indicate an increasing optimism in the market. A pivotal aspect supporting this positivity is the exchange inflow/outflow data, which signals a shift in sentiment towards Bitcoin.
Despite notable large Bitcoin transfers by Mt. Gox and significant miner transfers to over-the-counter desks, the overall influx of Bitcoin into crypto exchanges has markedly decreased recently.
Observing Decline in Bitcoin Exchange Inflows
As per a recent report from newsBTC analyzing Glassnode data, Bitcoin’s sharp drop below $50,000 in early August resulted from an overreaction by short-term holders. This led to a substantial increase in Bitcoin inflow to exchanges, exacerbating selling pressure and contributing to the price decline.
Supported by data from CryptoQuant, on August 5, BTC inflows to exchanges surged to 94,000 BTC, followed by 49,000 BTC on August 6 and 51,370 BTC on August 7, further intensifying selling momentum.
However, since then, inflows into exchanges have significantly decreased, indicating a potential slowdown in the selling frenzy. Data from CryptoQuant on August 22 revealed a notable reduction, with only 32,338 BTC entering exchanges compared to 32,723 BTC withdrawn, signaling a shift in market sentiment.
Further evidence from IntoTheBlock suggests a negative net flow of 3,560 BTC in the past 24 hours and a negative 2,000 BTC over the last seven days, indicating a shift in buying and selling dynamics.
Future Outlook for BTC
When more Bitcoin is withdrawn than deposited on exchanges, it indicates investors are opting to hold rather than sell, typically seen as a positive sign.
Currently trading at $61,000, Bitcoin has seen a 4.5% increase in seven days, with on-chain metrics hinting at a potentially positive future price action. Metrics like IntoTheBlock’s “Bid-Ask Volume” showing a shift towards the bid side and a positive flip in futures market derivatives momentum by 0.75 are bullish signals for Bitcoin’s price, especially with the potential for a short squeeze rally ahead.