Recent on-chain data reveals that short-term holders of Bitcoin have been depositing more of their supply onto centralized exchanges. This influx of Bitcoin, known as “exchange inflow,” suggests that these holders may be preparing to sell their assets. Typically, high exchange inflows indicate a bearish market sentiment and can negatively impact the price of the cryptocurrency.
Short-term holders, or STHs, are a significant group in the Bitcoin market, consisting of investors who have held their coins for less than 155 days. They are known for their tendency to sell quickly in response to fear, uncertainty, and doubt (FUD) or profit-taking opportunities.
A chart depicting the exchange inflows specifically for STHs over the past year shows that the indicator’s value increased during periods of market FUD, such as the SEC lawsuits against exchanges like Binance and Coinbase. However, the level of selling during these episodes was still lower compared to previous selloffs.
After a recent rally above $30,000, the exchange inflow from STHs has significantly increased, reaching a value of 1.28% of their supply. This level is higher than during the rebound rally in March. This intensified selling may explain the current sideways trend in Bitcoin’s price.
As of now, Bitcoin is trading at around $30,100, experiencing a 4% increase in the last week.
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