The data shows that the combined inflow and outflow volume of the bitcoin exchange has reached historically significant values, a sign that speculators are active.
bitcoin exchange flow volume has soared to $4.07 billion
According to data from the on-chain analysis firm glass nodeCurrency deposits and withdrawals on the bitcoin blockchain have continued to increase recently.
The relevant indicator here is “Exchange Flow Volume”, which tracks the combined amount of volume flowing into the wallets of all centralized exchanges (i.e. the inflows) and that out of these platforms (the Departures).
When the value of this metric increases, it means that investors are currently moving large amounts of cryptocurrencies on and off exchanges. As holders use these platforms for trading purposes, this trend suggests that interest in buying and selling activities in the market has increased.
On the other hand, the indicator's decline suggests that trading interest among investors may be cooling as they make fewer exchange-related transactions.
Now, here is a chart showing the trend in 30-day simple moving average (SMA) bitcoin exchange flow volume over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/Bitcoin-Exchange-Flows-to-Hit-All-Time-High-Volatility-Soon.jpeg" alt="bitcoin Exchange Flow Volume” width=”4096″ height=”2359″/>
The 30-Day SMA value of the metric appears to have shot up in recent days | Source: Glassnode on X
As shown in the chart above, the bitcoin 30-day SMA exchange flow volume has recently seen a rapid increase, suggesting that trading interest in the cryptocurrency has been increasing.
The reason behind this increase in interest is likely due to the price increase the asset has seen in recent months and all the ETF news that has been circulating.
However, the latter may result in exchanges losing some volume in the future, as investors become more comfortable with the traditional mode shift towards the now approved ETFs in favor of bitcoin (in fact, such migration is already underway, as some recent data suggests).
Following the latest surge in bitcoin 30-day SMA exchange flow volume, the value of the indicator has reached over $4 billion. In the graph, the analysis firm has highlighted the periods in which the metric has registered values higher than this.
It would appear that the two peaks of the 2021 bull run occurred when currency outflows and inflows were at higher levels. “Only 183 trading days have recorded a higher volume of exchange flow, highlighting the increase in investor speculative activity,” explains Glassnode.
It's hard to say exactly what impact the current high exchange flows could have on the price of the cryptocurrency, but it's more likely that the coin will show more volatility now that all of these speculators are making their moves at once.
btc Price
bitcoin has become obsolete in recent days as its price has remained stable around the $43,000 mark. However, with the current high volume of exchange flow, it may be a matter of time before the asset deviates from this sideways trend.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/Bitcoin-Exchange-Flows-to-Hit-All-Time-High-Volatility-Soon" alt="bitcoin price chart” width=”1534″ height=”868″/>
Looks like the price of the asset hasn't shown much movement recently | Source: BTCUSD on TradingView
Featured image by Jievani Weerasinghe on Unsplash.com, TradingView.com charts, Glassnode.com
