As Bitcoin once again breaks past the $51k mark, on-chain data suggests more than 20k BTC exited exchanges before this price move.
Bitcoin Netflows Say Around 20k BTC Flowed Out Of All Exchanges Yesterday
As pointed out by a CryptoQuant post, netflows amounted to 20k BTC exiting exchanges yesterday, the largest spike since September.
The “all exchanges netflow” is an on-chain indicator that measures the net amount of Bitcoin going into or out of wallets of all exchanges. The metric’s value is calculated by simply taking the difference between the inflows and the outflows.
When the indicator assumes positive values, it means the inflows are currently overwhelming the outflows, and a net amount of coins is entering exchange wallets. Investors usually send their crypto to exchanges for withdrawing to fiat or for purchasing altcoins. So, if such netflows persist, the outcome could be bearish for the price of BTC.
On the other hand, negative netflows appear when more Bitcoin is entering exchanges than the amount going out. Prolonged downward spikes of the indicator can be bullish for the crypto as they may mean holders are in a state of accumulation.
Related Reading | Growth Of Bitcoin ETFs & Other Instruments Doesn’t Support Supply Shock Narrative
Now, here is a chart that shows the trend in the BTC netflows over the past year:
Looks like the indicator has showed negative values recently | Source: CryptoQuant
As you can see in the above graph, the Bitcoin netflow had a huge negative spike yesterday, measuring more than 20k BTC.
This value of the netflow has been the highest negative one since the month of September. Shortly following this spike, BTC’s price showed strong momentum up, and the coin broke past $51k once again,
Related Reading | Quant Explains How Large Bitcoin Leverage Ratio Can Help Turnaround Price
Interestingly, December has so far had the most amount of BTC moving out of exchanges compared to the rest of the year.
This trend may show that whales are currently accumulating as they are withdrawing big amounts of coins to personal wallets. This could be bullish for the price of Bitcoin in the long term.
At the time of writing, Bitcoin’s price floats around $51k, up 8% in the last seven days. Over the past month, the crypto has lost 11% in value.
Below is a chart that shows the trend in the price of BTC over the last five days.
BTC’s price has shown sharp movement up in the past couple of days | Source: BTCUSD on TradingView
Bitcoin seems to have finally broken out of the long phase of consolidation as the crypto has now surpassed the $51k price mark once again.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com