Bitcoin exchange entries and exits continue to be a means of determining what investors do with their coins. These generally trend in a bullish or bearish market and deviate when there is a change in the market. This time around, with the market back in a new push, the examination of net exchange flows paints a rather positive picture. Indeed, bitcoin outflows continue to dominate in this regard.
Bitcoin outflows increase
For the past week, the price of bitcoin has been on an uptrend. This rally that began on Monday raged through the week, seeing the digital asset finally break through the $47,000 mark for the first time in three months. Speculation has abounded in the space since then as to how long such a recovery will last. As such, investors will look to metrics such as trade entries and exits to determine whether investors are buying or selling.
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For bitcoin, the numbers have been supportive of a continued rally. Examination of the on-chain data shows that the outflows still greatly exceed the inflows. Glassnode Alerts released a report which showed that while inflows were $7.9 billion last week, there was a total of $9.5 billion worth of bitcoins leaving centralized exchanges. This resulted in a negative net flow of -$1.5 billion.
🚨 Weekly On-Chain Swap Stream 🚨#Bitcoins $BTC
➡️ $7.9 billion in
⬅️ $9.5 billion
📉 Net flow: -$1.5 billion#Ethereum $ETH
➡️ $5.1 billion in
⬅️ $6.8 billion
📉 Net flow: -$1.7 billion#Attached (ERC20) $USDT
➡️ $4.9 billion in
⬅️ $4.4 billion
📈 Net flow: +$451.8Mhttps://t.co/dk2HbGwhVw
— glassnode alerts (@glassnodealerts) April 4, 2022
Data like this suggests that investors are selling less than they are buying. Since such high volumes are leaving the exchanges, it is expected that investors would rather hoard their coins during this time than sell. Therefore, since more BTC is removed from exchanges than moved to be sold, there is less supply in the open market, resulting in fewer coins available for demand, resulting in higher value. .
Tether shows better metrics
Bitcoin’s net flows aren’t the only thing that suggests the rally is in its infancy. Now, Tether (USDT) has the largest pairing of any other cryptocurrency in the market with bitcoin. This typically provides a direct correlation to how investors move their Tether in and out of bitcoin price exchanges.
BTC drops to $46K | Source: BTCUSD on TradingView.com
Since last week, Attachments also accelerated. A total of $4.4 billion in inflows was recorded while there was a total of $4.9 billion Tether moved to exchanges. It is presumed that these volumes transferred to the exchanges are intended for the purchase of cryptocurrencies like bitcoin.
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Given this and the fact that bitcoin exchange outflows keep growing, there is still significant buying pressure in the market. Coupled with the hoarding trend among bitcoin investors, bitcoin may be just beginning this rally.
Featured image from The Financial Commission, chart from TradingView.com