On-chain data suggests the Bitcoin whales may have participated in a significant amount of buying while the market was panicking about the recent lows. Bitcoin whales bought the recent dip while the market panicked.
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Bitcoin Exchange Netflow Has Been Quite Negative Recently
An analyst in a CryptoQuant Quicktake post has highlighted recent outflows from exchanges. The "exchange netflow" indicator tracks the net amount of Bitcoin entering or exiting centralized exchange wallets, calculated by subtracting outflows from inflows. A positive value indicates more Bitcoin entering than exiting, while a negative value suggests withdrawals are occurring, potentially signaling accumulation by holders. This trend could have bearish implications for the cryptocurrency when investors deposit BTC for selling purposes, but could be bullish for the asset's price if withdrawals are on the rise. Additionally, a chart depicting the trend in Bitcoin exchange netflow over the past year is provided.
The graph above indicates recent deep negative spikes in Bitcoin exchange netflow, suggesting significant outflows from these platforms. These withdrawals coincided with BTC slipping towards the $41,600 level, indicating potential buying activity amidst market panic.
The scale of the deposits suggests involvement of whale entities, signaling a positive outlook for the rally. Microstrategy's announcement of a $615 million BTC acquisition adds to the optimistic sentiment for the coin. The connection between the exchange netflows and the acquisition announcement is intriguing. It's uncertain if there's a direct link, but it's possible that whales who bought at the recent lows were aware of the acquisitions beforehand.
Another explanation could be that large investors sought an entry point into the asset ahead of potential ETF approvals, and the dip presented an opportune moment to do so.
Regardless, the moves made by the whales seem to have paid off so far, as the Bitcoin price has rebounded from its lows, albeit not too strongly.
BTC Price
Bitcoin had recovered to as high as $43,800 during the past day, but the asset has since slumped back down as it’s now floating around the $42,800 mark.
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.