On-chain data suggests that Bitcoin whales may be piling into the decline as spot exchanges recently saw their largest withdrawals of 2024.
Bitcoin Exchange Netflow has turned dark red recently.
As one analyst at CryptoQuant Quicktake pointed out, mailA large number of coins have left exchanges recently. The relevant indicator here is “net exchange flows,” which tracks the net amount of Bitcoin moving into or out of wallets connected to all centralized exchanges.
When this metric is negative, it means that outflows are currently outpacing inflows, and a net amount is leaving the wallets of these platforms. This type of trend could indicate that investors are looking to hold on for the long term, which could naturally be bullish for Bitcoin.
On the other hand, a positive indicator indicates that coin holders are making net deposits on exchanges. The exact impact of such a trend on the cryptocurrency depends on the type of exchange that receives these deposits, whether it is a spot exchange or derivatives.
In the case of spot exchanges, inflows can be negative for the price, as they indicate that investors may be looking to sell. Derivatives inflows are not as simple, but they lead to higher volatility for the asset, as they indicate that traders are looking to open more risky positions in the market.
Now, here is a chart showing the trend in net Bitcoin exchange flows, especially for spot exchanges since the beginning of the year:
Looks like the value of the indicator has seen a sharp red spike recently | Source: CryptoQuant
As shown in the chart, Bitcoin net trading flows to spot exchanges have seen a massive negative spike during the latest price drop, indicating that some large investors are accumulating it.
In total, this surge in net outflow corresponds to more than 46,000 Bitcoin leaving these exchanges, which is equivalent to more than $2.6 billion at the cryptocurrency’s current exchange rate.
Given the timing of the outflows, it is possible that whales are banking on the price rising from these recent lows as they move their coins into self-custody.
Live streaming platforms are not the only ones witnessing this trend, as there is another trend amount He pointed out that net flows to derivatives exchanges also witnessed significant negative increases.
The value of the metric appears to have been quite negative in recent days | Source: CryptoQuant
These net outflows from derivatives platforms may indicate that whales are looking to reduce their risk. But since these coins have not been introduced to spot exchanges, these derivatives users may be planning to hold them for the long term, similar to spot whales.
Bitcoin price
At the time of writing, Bitcoin is trading at around $57,200, down about 9% from last week.
The price of the coin seems to have overall been moving sideways during the last few days | Source: BTCUSD on TradingView
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com