Bitcoin Exchange Inflows See Sharp Drop, Are Sellers Tiring Out?

Bitcoin
is
beginning
to
show
signs
of
a
potential
upward
trend
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

supporting
this
positive
outlook

is
the
exchange
inflow/outflow
data,
which
reveals
a
shift
in
sentiment
toward
Bitcoin. 

Despite
some
notable
large-scale
Bitcoin
transfers
by
the
defunct
exchange
Mt.
Gox
and

significant
movements
by
miners

to
over-the-counter
(OTC)
desks,
the
overall
inflow
of
Bitcoin
into
crypto
exchanges
has
sharply
declined
in
the
past
few
days.

Bitcoin
Exchange
Inflows
See
Sharp
Drop

According
to

a
recent
report

by
newsBTC,
which
analyzed
data
from
Glassnode,
Bitcoin’s
sharp
decline
below
$50,000
in
early
August
was
largely
driven
by
an
overreaction
from
short-term
holders.
This
panic
led
to
a
significant
influx
of
Bitcoin
into
exchanges,
increasing
the
selling
pressure
and
contributing
to
the
price
drop.

Supporting
this,

data
from

CryptoQuant
reveals
that
on
August
5,
BTC
inflows
to
exchanges
surged
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,
the
inflows
into
exchanges
have
decreased
substantially
since
then,
signaling
that
the
initial
wave
of
selling
may
be
losing
steam.
CryptoQuant’s
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withdrawn,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. 

Further
corroborating
this
shift,

data
from

IntoTheBlock
indicates
that
the
total
Bitcoin
netflow
across
aggregated
exchanges
has
turned
negative,
with
a
net
outflow
of
3,560
BTC
in
the
past
24
hours
and
a
negative
2,000
BTC
over
the
past
seven
days.
Although
the
difference
between
outflows
and
inflows
is
relatively
small,
it
represents
the
first
significant
change
in
buying
and
selling
dynamics
since
the
beginning
of
August.

What’s
Next
For
BTC?

Historically,
when
more
Bitcoin
is
withdrawn
from
exchanges
than
deposited,
it
suggests
that
investors
are
choosing
to
hold
onto
their
assets
rather
than
sell
them,
which
is
typically
a
bullish
signal. 

At
the
time
of
writing,
Bitcoin
is
trading
at
$61,000
and
is
up
by
4.5%
in
seven
days.
Other
on-chain
metrics
are
providing
a
cautiously
optimistic
outlook
for
BTC,
hinting
at
the
possibility
of
upcoming
positive
price
action.
One
such
metric
is
IntoTheBlock’s
“Bid-Ask
Volume,”
which
currently
shows
a
3.93%
shift
towards
the
bid
side.

This
shift
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
a
growing
number
of
investors
are
anticipating
a
rise
in
the
price
of
Bitcoin.

The
futures
market
derivatives
momentum
has
also
flipped
to
a
positive
0.75.
This
is
particularly
a
bullish
signal,
especially
considering
the
Bitcoin
price
now
finds
itself

at
a
short
squeeze.

Featured
image
created
with
Dall.E,
chart
from
Tradingview.com