Bitcoin plunges below $22,000 as exchange inflows increase
On-chain data suggests that Bitcoin exchanges have surged recently, suggesting that selling on exchanges may be behind the cryptocurrency’s recent drop below $22k.
Bitcoin All Exchange Inflow has observed a great value in recent days
As pointed out by a CryptoQuant post, whales with 1k to 10k BTC moved a significant number of coins to exchanges recently.
The “Exchange Inflow” is an indicator that measures the total amount of Bitcoin moving to exchange wallets on a given day.
When the value of this metric is high, it means that a large number of coins are being transferred to exchanges right now. If a significant portion of this BTC went to spot exchanges, such a trend could prove bearish for the price of the crypto, as investors usually transfer to these exchanges for selling purposes.
On the other hand, low inflow values may indicate that exchanges are seeing little selling activity right now. This can be either neutral or bullish for the value of the coin.
A modified version of the inflow highlights the individual contribution to the total inflow from retail investors of various sizes as well as whales in the market. Here is a chart specific to the 100-1k BTC, 1k-10k BTC and over 10k BTC holder groups:
Looks like the metric registered a large value recently | Source: CryptoQuant
As you can see in the graph above, Bitcoin all exchanges observed a sharp increase just a couple of days ago.
It appears that the heaviest contribution to this spike came from whales with wallet balances in the 1k to 10k BTC range.
If a large portion of these inflows actually went to spot exchanges, the recent plunge in the price of the crypto may have been triggered by the dumping by these whales.
BTC price
At the time of writing, Bitcoin’s price is hovering around $21.4k, down 10% in the last seven days. Over the past month, the crypto has lost 4% in value.
The chart below shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have plummeted down during the last couple of days | Source: BTCUSD on TradingView
After moving sideways around the $24k mark for a while, Bitcoin seems to have broken out of the consolidation and dropped lower. The crypto has now broken below the $22k level for the first time since more than 20 days ago and the decline doesn’t seem to have stopped yet.
Featured image from André François McKenzie on Unsplash.com, charts from TradingView.com, CryptoQuant.com
