Bitcoin Exchange Inflows Plunge to a Nearly Decade Low, Despite High Interest in BTC Exposure
Summary:
Bitcoin (BTC) exchange inflows have hit a nearly decade low, according to CryptoQuant. After Bitcoin touched its all-time high of $73,800, daily inflows decreased significantly. Bitcoin traders seem less interested in keeping coins ready for immediate sale on exchanges. Despite Bitcoin price volatility, the interest in increasing BTC exposure among investors remains. Market analysts have raised positive remarks tied to Bitcoin 'whales', but caution has been advised regarding their activity.
Bitcoin (BTC) is experiencing the lowest exchange inflows in nearly a decade, according to recent data. On-chain analytics platform, CryptoQuant, has reported a considerable drop in daily BTC inflows since the cryptocurrency hit an all-time high of $73,800. It appears that Bitcoin traders are less inclined to keep their coins readily available for immediate sale on exchanges. CryptoQuant noted that the months of April and May 2024 witnessed some of the smallest daily inflows to major exchange accounts in a decade. On April 20, during a period when BTC/USD levels were comparable to present-day rates, only 8,400 BTC made their way into exchanges. Silent flows of this stature were last seen when Bitcoin was valued below $1,000. The platform sources its data from a wide range of spot and derivative exchanges.
The figures depict a notable change in holder sentiment this year, indicating a new era of institutional participation in Bitcoin investment. Investors' desire to increase their BTC exposure has remained intact despite the volatility of the Bitcoin price, even during last week's dip to $56,500. Market analysts continue to highlight the positive developments associated with Bitcoin 'whales'. However, Ricky Mignolet, a contributor at CryptoQuant, cautioned about focusing too much on these 'whales' and their activities. According to him, 'whales' holding between 1,000 and 10,000 BTC have not been consistently active in the ongoing upward trend. He suggested that whales might not be ready to sell off yet as the cycle has not concluded, and that there may be demand in the over-the-counter (OTC) market capable of absorbing large sale volumes without any exchanges post-ETF approval.
Providing insight into the current market condition, the anonymous lead on-chain analyst at Glassnode under the pseudonym Checkmate noted that the new spot Bitcoin exchange-traded funds could be influencing the data. He emphasized that data associated with these entities can be misleading and said it's likely that most of the large 'whale' wallets being monitored belong to ETFs and exchanges. He concluded by stressing that true alpha is rarely derived from observing the activities of these 'whales.' This piece does not provide investment advice or suggestions. Every investment move contains inherent risks and readers should conduct thorough research before making any decisions.
Published At
5/7/2024 5:10:30 PM
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