On-chain data shows the Bitcoin exchange inflow towards Binance has spiked during the past day, which may be bearish for the price.
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Bitcoin exchange inflow spikes, potentially indicating a bearish trend. Bitcoin Exchange Inflow Has Registered A Large Spike
According to an analyst at CryptoQuant, a large deposit has been made by a whale to the cryptocurrency exchange Binance. The "exchange inflow" metric is used to measure the total amount of Bitcoin that investors send to a specific centralized exchange, which in this case is Binance. High values of this metric indicate that holders are depositing large amounts to the platform, which may be for selling-related purposes, potentially causing a bearish effect on the price. Conversely, low values imply that the market's selling pressure may be low. Below is a chart depicting the trend in Bitcoin exchange inflow for Binance over the past day. Bitcoin exchange inflow spikes, potentially indicating a bearish trend.
According to the graph above, there has been a significant increase in Bitcoin exchange inflow for Binance in the past 24 hours. A deposit of around 4,451 BTC, worth approximately $133 million at the current exchange rate, has been made to the platform's wallets by a whale who has purchased 20,000 BTC over the last eight months. Even after the transaction, the investor still has over 15,000 BTC remaining in their wallet.
This transfer may have been made to realize some profits at the current market prices. However, as the deposit is quite substantial, it could potentially cause bearish ripples in the market. It's worth noting that the deposits were made towards the derivatives side of the exchange and not the spot platform, as explained by another quant.
It is likely that the transfer was not made to directly sell the coins, but rather to open positions on the derivatives market. An analyst notes that large wallets like this one rarely move directly to derivative exchanges, especially since the wallet in question holds 10,000+ BTC, making it one of the largest whales on the network. While such a large position can cause volatility in the price of Bitcoin, selling from spot deposits may not necessarily be bearish for the asset.
At the time of writing, Bitcoin is trading around $29,800, down 3% in the last week.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.