Bitcoin hit a new all-time high (ATH) above the $104,000 mark over the past day, but on-chain data shows that investors are still unwilling to sell.
Bitcoin exchange net flow remained negative during the recent rally
As one of the analysts at CryptoQuant Quicktake explained mailBitcoin has continued to leave exchanges recently. The relevant on-chain metric here is Exchange Netflow, which, as its name suggests, tracks the net amount of BTC entering or exiting wallets linked to centralized platforms.
When the value of this measure is positive, it means that investors are making net deposits on the exchanges. Since one of the main reasons holders use these platforms is for selling purposes, this type of trend can have a bearish impact on BTC.
On the other hand, being negative means that there are greater exchange outflows than inflows. Such a trend could be a sign of investors wanting to hold their coins for the long term, which can be naturally bullish for the asset’s price.
Now, here is a chart showing the trend in Bitcoin Exchange Netflow over the past two years:
As shown in the chart above, Bitcoin Exchange Netflow has observed significant negative spikes over the past month or so, indicating some significant drawdowns are occurring.
This outflow spree came even though the cryptocurrency noticed a massive trend towards new ATHs. The chart shows that this was not the case during the rise in the first quarter of this year.
Outflows were certainly occurring at the time, but there were also notable spikes in net inflows among them, implying that demand was there to sell the asset.
Exchange Netflow’s recent negativity sustained Bitcoin during the recent surge above $100,000, a sign that investors are still unwilling to give up on BTC even at these high prices.
If this trend continues, this range could have more room to run. However, it remains to be seen how long shareholders can remain calm.
In general, the higher investors’ profits, the more likely they are to engage in a sell-off. Therefore, with Bitcoin continuing to perform well, it may only be a matter of time before a major profit-taking wave arrives.
Bitcoin price
Bitcoin has finally broken out of its recent consolidation phase with an increase of over 7% over the past 24 hours. The asset briefly broke above the $104,000 level in this rally, but has since seen its price pull back slightly to $103,500.