There’s less Bitcoin flowing in and out of cryptocurrency exchanges lately, which indicates calm from those who’ve been keen to profit from its price movements — especially when compared to levels recorded in June and July.
In fact, the amount that traders have sent to major cryptocurrency exchanges is now on par with the total being taken off-exchange, reports Delphi Digital in analysis shared with Hard Fork.
“It’s clear there were significant net outflows during the big rally in the second quarter of 2019, as bullish sentiment really started picking up and individuals were moving Bitcoin off exchanges because they had no intention of selling in the immediate future,” said the firm.
42% of ‘inflowing’ Bitcoin during July and August went to Binance
Delphi Digital also charted the cumulative daily inflow of Bitcoin into prominent cryptocurrency exchanges Binance, BitMEX, Bitfinex, Poloniex, Bitstamp, and Bittrex.
The firm found that more than 42 percent of the total volume sent to these exchanges in August and July ($4.4 billion) went directly to Binance.
“The relationship between Bitcoin price and flows is pretty apparent. Price rallies were typically accompanied by sizable inflows to exchanges as individuals looked to take profit,” said Delphi Digital.
Analysts noted the volume of inflowing Bitcoin can be representative of significant selling pressure. This was the case in early July, when the price of Bitcoin dropped shortly after cryptocurrency exchanges had received lots of deposits.
To compare, less Bitcoin was sent to these exchanges in the beginning of August, which didn’t immediately impact its price.
Considering Bitcoin‘s extended period of price consolidation that has followed its “parabolic run” at the end of June, Delphi Digital’s analysts warn there could be a “significant move” on the horizon.
“A breakout above the $11,000 – $11,200 range for BTC could be the catalyst for another strong move higher. Conversely, a break below ~$9,400 may signal more pain ahead in the near term, though we’ve seen significant buying pressure in this range, evident in Bitcoin’s quick bounce off these levels in mid-to-late July and the end of August,” said the firm.
This article is for educational purposes only. Do not treat this as investment advice. Do your own research.