Bitcoin Outflows Spike As 30k BTC Exits Exchanges, Reserve Plunges Down
11 Marzo 2022 - 1:00PM
NEWSBTC
Bitcoin outflows have shown a spike amounting to 30k BTC today,
leading to a plunge in the all exchanges reserve. Bitcoin Netflow
Shows Deep Negative Spike As 30k BTC Exits Exchanges As pointed out
by an analyst in a CryptoQuant post, the BTC exchange netflow
showed a large negative spike earlier today. The “outflow” is a
measure of the total amount of Bitcoin exiting wallets of all
exchanges. Similarly, the number of coins being deposited to
exchanges is the “inflow.” The difference between the inflow and
the outflow is called the netflow. This indicator tells us the net
amount of coins moving into or out of exchanges. When the value of
this indicator is negative, it means outflows are currently
overwhelming the inflows and a net amount of Bitcoin is exiting
exchanges. Such a trend, when prolonged, can be bullish for the
price of the crypto as it may be a sign of accumulation. Related
Reading | USDC Inflow Spikes Up, Will It Act As Dry Powder For
New Bitcoin Rally? On the other hand, a positive netflow shows that
a net amount of coins are entering exchange wallets at the moment.
Since investors usually deposit to exchanges for selling purposes,
this trend can be bearish for the coin. Now, here is a chart that
shows the trend in the Bitcoin netflow over the past couple of
weeks: Looks like the indicator showed a large downward spike
recently | Source: CryptoQuant As you can see in the above graph,
the Bitcoin netflow had a huge negative spike earlier today. This
amounted to an outflow of more than 30k BTC, or over $1.2 billion.
Such a large amount of coins exiting exchanges has made the
exchange reserve (a metric that measures the total number of BTC
present on exchanges) plunge down: The indicator's value seems to
have plummeted today | Source: CryptoQuant If this outflow belongs
to one or more whale entities withdrawing their Bitcoin for hodling
in cold wallets, then it can be quite bullish for the price of the
crypto as it has significantly reduced its sell supply (that is,
the reserve). Related Reading | Bitcoin On Course To Hit $100K
Nine Months From Now, Bitbull CEO Predicts However, as the quant
notes, it’s yet unclear at the moment what this negative netflow
may signify. It’s possible it could be just an internal transfer
within the exchange wallets. And if so, it shouldn’t have any
positive effect on the price. BTC Price At the time of writing,
Bitcoin’s price floats around $40k, down 3% in the last seven days.
Over the past month, the crypto has lost 6% in value. The below
chart shows the trend in the price of the coin over the last five
days. BTC's price plunged down yesterday | Source: BTCUSD on
TradingView Featured image from Unsplash.com, charts from
TradingView.com, CryptoQuant.com
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