Bitcoin Sees Large Influx of Deposits on Kraken Exchange
Recent on-chain data reveals that the cryptocurrency exchange Kraken has experienced its largest deposit since 2018, causing Bitcoin to drop to $27,500. A report from CryptoQuant explains that Kraken has seen a historic inflow of 14,924 BTC in the past day. This “exchange inflow” metric tracks the total amount of Bitcoin entering centralized exchange wallets.
When this metric spikes, it indicates that the exchange is currently receiving significant deposits. Typically, holders move their coins from self-custodial wallets to exchanges for selling purposes. Therefore, high inflows suggest selling activity in the market, potentially impacting Bitcoin’s value if there isn’t an equivalent amount of outflows to counteract it.
The Impact of Exchange Reserves
Kraken’s Bitcoin exchange reserve, which monitors the total number of coins in its wallets, experienced a sharp drop in June followed by a significant price rally. The recent surge in inflows has caused the reserve to rise again, indicating that there haven’t been enough withdrawals to offset these large deposits.
While it’s unclear whether these deposits were made for selling purposes, the decline in Bitcoin’s price since they occurred suggests that some traders may have taken advantage of the profit-taking opportunity presented by the recent rally.
Bitcoin Price Correction
Bitcoin reached a peak above $28,500 before profit-taking led to a drop towards the $27,500 level.
Hot Take: Large Inflows on Kraken Raise Concerns about Selling Pressure
The significant influx of Bitcoin deposits on the Kraken exchange has raised concerns about potential selling pressure in the market. The high inflows suggest that holders are moving their coins to exchanges, possibly for selling-related purposes. This trend could have bearish effects on Bitcoin’s value if there isn’t an equal amount of outflows to counteract the selling.
Additionally, the rise in Kraken’s Bitcoin exchange reserve indicates that there haven’t been enough withdrawals to offset these large deposits. While it’s uncertain whether these inflows were made for dumping, the decline in Bitcoin’s price following the deposits suggests that some traders may have taken advantage of the profit-taking opportunity presented by the recent price rally.
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