Bitcoin Bearish Signal: Exchange Netflows Spike Up


On-chain data shows that net bitcoin exchanges have seen a sharp positive rally recently, which is a potentially bearish sign for the cryptocurrency’s price.

Netflow for all Bitcoin exchanges up after 9% inflation report

As pointed out by an analyst at CryptoQuant MailRecently, exchanges have seen a large amount of BTC deposits.

The “Net Flow of All Exchanges” is an indicator that measures the net amount of bitcoin that enters or exits the wallets of all central exchanges as a whole. The scale value is calculated simply by taking the difference between the inflows and outflows.

When the netflow value is positive, it means that a net number of coins are now moving into these wallets. Since investors usually deposit their coins on exchanges for selling purposes, this type of trend can be downward in the value of BTC.

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On the other hand, a negative index value indicates that investors are withdrawing their currencies at the moment. Such a trend, when it continues for a long time, could be a sign of accumulation from the owners, and therefore could be bullish for the price of the cryptocurrency.

Now, here is a chart showing the trend in the net flow of all Bitcoin exchanges over the past week:

Bitcoin Netflow

Looks like the value of the metric has spiked up recently | Source: CryptoQuant

As you can see in the chart above, the net bitcoin trading flow has noticed a positive rally over the past 24 hours.

There was another spike not long before this last spike, but the other spike was neutralized by a similarly large negative value on the scale.

Related reading | Market update: MATIC, UNI and AAVE outperform as Bitcoin struggles to stay above $20k

Quantum in the post notes that flows on the cryptocurrency exchange Twins (which whales are known to use) contributed to this positive net flow value.

The deposits came two days after the CPI report for the month revealed that inflation rose 9% in June.

If the inflows are indeed from whales looking to dump their coins, the near-term outlook could be bearish for the price of bitcoin.

BTC price

At the time of writing this report, Bitcoin price It is floating around $20.8K, down 4% in the past seven days. Over the past month, the cryptocurrency has lost 7% of its value.

The chart below shows the currency price trend over the past five days.

Bitcoin price chart

After the upwards move, the value of the crypto seems to have been moving sideways over the last couple of days | Source: BTCUSD on TradingView
Featured image from anvesh baru on Unsplash.com, charts from TradingView.com, CryptoQuant.com



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