On-chain data shows that bitcoin's exchange whale index has recently increased, a sign that could prove bearish for the asset's price.
60-Day MA bitcoin Exchange Whale Ratio Has Rising Rapidly Recently
As noted by an analyst at CryptoQuant Quicktake mail, the whale exchange index has seen strong growth recently. The “Exchange Whale Ratio” is an indicator that tracks the relationship between the sum of the top 10 transfers destined for exchanges and the total inflow of exchanges.
It can be assumed that the ten largest foreign exchange inflows come from whales, which are entities that have the largest stakes in the network and, therefore, also the ones that have the greatest influence on the market.
The Exchange Whale Ratio basically tells us how the currency inflow activity of these huge investors compares to that of the entire bitcoin market.
When the value of this metric is high, it means that the top 10 forex inflows are accounting for a significant portion of market deposits. Generally, investors make deposits when they want to use any of the services provided by these platforms, which may include selling.
As such, the indicator having a high value could imply that these large holders are contributing a lot of selling pressure right now. Naturally, this type of trend can turn out to be bearish for the asset.
On the other hand, the fact that the ratio is low suggests that the whales are offsetting a relatively healthy portion of the total currency inflows, which may have a bullish effect on the price.
Now, here is a chart showing the trend in the bitcoin Exchange Whale Ratio's 60-day moving average (MA) over the past few years:
<img decoding="async" class="aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/06/The-proportion-of-whales-in-the-Bitcoin-exchange-is-increasing.png" alt="Share of bitcoin Exchange Whales” width=”1280″ height=”645″ data-recalc-dims=”1″/>
Looks like the 60-day MA value of the metric has been trending up over the last few months | Source: CryptoQuant
As can be seen in the chart above, the MA bitcoin 60-Day Exchange Whale Index has been rising on a steep upward trajectory over the past few months. This would suggest that whales have recently been increasing their share of currency inflows.
The rise of the indicator occurred when the price of the cryptocurrency experienced growth and established a new all-time high (ATH). On the chart, the quant highlights what happened during the last few times when the metric witnessed a similar rally.
It would seem that the price of the overall cryptocurrency has seen a sharp drop every time the Exchange Whale Ratio has grown to high values. So far, btc has yet to experience a similar drop, although its price has lost its bullish momentum and has been moving sideways recently.
“I think this has not happened because of the huge demand for spot ETFs,” the analyst notes. It now remains to be seen how long demand will be able to absorb this increasing selling pressure from the whales and whether the price will succumb in a similar manner as in the past when buying dries up.
btc Price
At the time of writing, bitcoin is trading around $65,600, a drop of more than 5% in the last seven days.
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The price of the coin has continued to be stuck in its consolidation range recently | Source: BTCUSD on TradingView
Dall-E Featured Image, CryptoQuant.com, TradingView.com Chart
