Bitcoin Long-Term Holders Depositing to Exchanges: Bearish Sign for Price
According to on-chain data, Bitcoin long-term holders are currently making deposits to exchanges, which could have a bearish impact on the price. This trend is indicated by the increase in exchange inflow and exchange reserve.
Understanding Exchange Inflow and Exchange Reserve
The exchange inflow measures the total amount of Bitcoin transferred by holders to centralized exchanges, while the exchange reserve measures the total amount of Bitcoin held in exchange wallets.
When the value of the exchange inflow spikes, it suggests that investors are moving a significant number of coins to exchanges. This trend can indicate selling activity. To track this trend accurately, the data is limited to spot platforms where selling occurs.
Coin Days Destroyed: A Modifier for Exchange Inflow
The analyst has also used Coin Days Destroyed (CDD) as a modifier for exchange inflow. CDD measures the activity of dormant coins in the market. When these coins are moved after being idle for a long time, the CDD resets or “destroys” the accumulated coin days. The exchange inflow CDD specifically tracks coin days destroyed through transfers to exchanges.
Analyzing the Charts
The charts show the trends in the 7-day simple moving average (SMA) value of Bitcoin’s exchange inflow CDD and the 14-day SMA exchange reserve.
From the first graph, it is evident that the Bitcoin exchange inflow CDD has recently experienced a significant spike, indicating the movement of dormant coins to exchanges. This suggests that long-term holders may be selling their coins.
The second chart shows that the exchange reserve has also increased alongside the spike in exchange inflow CDD. This implies that there haven’t been enough withdrawals to offset these inflows.
Impact on Bitcoin Price
It remains to be seen how these potential selling moves from long-term holders will affect the price of Bitcoin in the coming days.
BTC Price
Bitcoin’s price has remained stagnant around $26,400 recently.
Hot Take: Long-Term Holders Depositing to Exchanges: A Sign of Market Uncertainty
The recent increase in Bitcoin long-term holders depositing their coins to exchanges suggests a wavering confidence in the market. Long-term holders are typically considered resilient, so their selling activity could indicate a shift in sentiment. The rise in exchange inflow and exchange reserve further supports this trend. It remains uncertain how these selling moves will impact the Bitcoin price, but it is an important development to monitor. The current stagnant price around $26,400 adds to the overall uncertainty in the market.
By
By
By
By
By