On-chain data shows that the bitcoin exchange whale ratio has remained at a high value lately, a potentially bearish sign for the cryptocurrency’s price.
Bitcoin exchange whale is about to enter “extremely high risk” territory
As explained by an analyst at CryptoQuant mailthe 72-hour moving average of the whale is close to 0.90, which is a high-risk area.
The “whale exchange ratioIt is an indicator defined as the sum of the first ten inflows to exchanges divided by the total inflows.
In simpler terms, this metric tells us the portion of the total inflows contributed by the ten largest transactions, which typically belong to whales.
When the value of this indicator is higher than 0.85, this means that whales occupy a very large proportion of the exchange flows at the moment.
Since investors typically move their bitcoins to exchanges for selling purposes, this trend could be a sign that whales are also dumping at the moment.
The value of the index usually stays above this limit during a BTC bear market, or a fake bull for mass dumping.
Related reading | Bitcoin Trading Volume Drops From Recent High
On the other hand, values below the 0.85 mark typically indicate that incoming whale flows are currently in a healthier equilibrium with the rest of the market. The ratio value usually stays in this region during upward cycles.
Now, here is a graph showing the trend in the bitcoin exchange whale percentage (72 hour MA) over the past two months:
It looks like the indicator has been at a high value recently | Source: CryptoQuant
As you can see in the chart above, the bitcoin exchange whale ratio is currently around 0.89, above the 0.85 threshold.
According to the quantity given in the publication, values above 0.90 can be considered a “very high risk” area. So, the current value of the pointer is very close to that.
In this month so far, the value of the ratio has almost always remained above the 0.85 line, with some rise above the 0.90 level.
The analyst believes that the whales are now active due to the minutes of the May Fed meeting, and if the ratio remains high in the near future, that could cause trouble for Bitcoin.
At the time of writing this report, Bitcoin price It is floating around $28.8K, down 2% in the past seven days. Over the past 30 days, the cryptocurrency has lost 30% of its value.
The chart below shows the currency price trend over the past five days.
Seems like the price of the coin has plunged down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com