Main navigation

Rising Bitcoin Exchange Inflows Might Be Worrying Sign for Investors

News
Thu, 10/14/2021 - 09:08
article image
Arman Shirinyan
With exchange balances recovering, some selling pressure might hit the market in the future
Rising Bitcoin Exchange Inflows Might Be Worrying Sign for Investors
Cover image via stock.adobe.com

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Read U.TODAY on
Google News

With the rapid price increase of Bitcoin, exchange inflows reach a plateau after achieving 100,000 Bitcoin outflows from exchanges, according to Glassnode.

The exchange inflows and outflows are the first indications of the presence or absence of selling pressure on the market. With continuous outflows from the exchange, Bitcoin has been actively growing due to the absence of selling volumes coming from exchanges.

Glassnode Data
Source: Glassnode

With prices reaching the previous ATH, more traders are becoming concerned and are willing to take profits. The highest inflow rates were previously present in May, prior to the massive Bitcoin sell-off that led to the 40% correction on the market.

Exchange inflows can also be used to track the overall sentiment on the market. With low inflow rates, traders determine whether market participants are holding funds in their wallets or are looking to spend them. While funds remain on exchanges, investors are more likely to sell once the price reaches their target.

Related
Elon Musk Highlights Importance of Running Dogecoin Nodes

As mentioned previously, the increased inflow rates are local, and the overall trend remains negative, with the funds held by exchanges moving either down or in a range. Total exchange balances remain at 2.45 BTC, which are currently at August 2018 levels. At the previous ATH, the number of funds stayed at 3.11 million BTC. With the current outflow rate, the exchanges lost 21% of the ATH balance.

Glassnode Chart
Source: Glassnode

At press time, Bitcoin is trading at $57,610, previously testing the $59,000 zone. But due to the presence of a large number of sell orders, the price swiftly retraced back under $58,000.

article image
About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.