bitcoin is starting to show signs of a potential uptrend as several on-chain metrics are turning positive. These metrics, which often serve as indicators of future price movements, paint a picture of growing optimism in the market. One of the key indicators bitcoin/bitcoin-could-rise-1000/” rel=”nofollow noopener” target=”_blank”>supporting this positive perspective is the exchange inflow/outflow data, which reveals a change in sentiment towards bitcoin.
Despite some notable large-scale bitcoin transfers by the defunct Mt. Gox exchange and Significant movements of miners On OTC desks, the overall flow of bitcoin to cryptocurrency exchanges has decreased dramatically in recent days.
bitcoin inflows to exchanges suffer a sharp drop
Accordingbitcoin/glassnode-bitcoin-price-50000/” rel=”nofollow noopener” target=”_blank”> A recent report According to newsBTC, which analyzed data from Glassnode, bitcoin’s sharp drop below $50,000 in early August was largely due to an overreaction by short-term holders. This panic led to a significant influx of bitcoin into exchanges, which increased selling pressure and contributed to the price decline.
Supporting this, btc/chart/exchange-flows/exchange-inflow-total?exchange=all_exchange&window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=column” rel=”nofollow noopener” target=”_blank”>data of CryptoQuant reveals that on August 5, btc inflows to exchanges increased dramatically to 94,000 btc. The trend continued with 49,000 btc on August 6 and another 51,370 btc on August 7, further amplifying the selling momentum.
Interestingly, inflows to exchanges have since decreased substantially, indicating that the initial wave of selling may be losing steam. CryptoQuant data from August 22 shows a marked reduction, with only 32,338 btc entering exchanges, compared to 32,723 btc withdrawn, indicating a shift in market sentiment.
To further corroborate this change, btc/deep-dive?group=exchanges&chart=net-flows” rel=”nofollow noopener” target=”_blank”>data of IntoTheBlock reports that the total net flow of bitcoin on aggregated exchanges has turned negative, with a net outflow of 3,560 btc in the past 24 hours and a drop of 2,000 btc in the past seven days. Although the difference between outflows and inflows is relatively small, it represents the first significant shift in buying and selling dynamics since early August.
What's next for btc?
Historically, when more bitcoin is withdrawn from exchanges than deposited, this suggests that investors are choosing to hold onto their assets rather than sell them, which is typically a bullish sign.
At the time of writing, bitcoin is trading at $61,000 and is up 4.5% in seven days. Other on-chain metrics provide a cautiously optimistic outlook for btc, suggesting the possibility of positive price action ahead. One such metric is IntoTheBlock’s “bid-ask volume,” which currently shows a 3.93% shift toward the supply side.
This change indicates a higher volume of buy orders compared to sell orders, revealing that there are more buyers than sellers in the market. The increase in buying activity suggests that an increasing number of investors are anticipating an increase in the price of bitcoin.
The momentum of the futures market derivatives has also changed to a positive 0.75. This is particularly a bullish signal, especially considering that the bitcoin price is nowbitcoin-derivatives-signal-major-risk-of-explosive-short-squeeze-rally-ahead/” rel=”nofollow noopener” target=”_blank”> in a bit of a bind.
Featured image created with Dall.E, chart from Tradingview.com
