Is Bitcoin Bottoming In? This condition on the chain has not been fulfilled yet
A Bitcoin on-chain metric still hasn’t formed the same state as the previous bottom, suggesting that the current low may not be in yet.
Stablecoin Exchange Inflows (Top 10) has not shown any peaks recently
As pointed out by an analyst in a CryptoQuant post, the top 10 stablecoin exchanges saw an increase in the bottom of July 2021.
The “Stablecoin Exchange Inflow (Top 10)” is an indicator that measures the sum of the top ten stablecoin transactions heading to exchanges. The calculation includes data for all types of stablecoins.
Since the top ten transfers are usually from the whales, this indicator can tell us whether whales are active on exchanges or not.
Typically, investors shift to stable when they want to escape the volatility associated with most other cryptos. When these holders feel the prices are right to re-enter these markets, they buy into other coins using stablecoins, giving them a buying push.
When the value of the top 10 stablecoin exchange streams is high, it means that whales can send large amounts of stablecoins to exchanges to buy other coins. Such a trend can therefore be bullish for the prices of cryptos such as Bitcoin.
Now, here is a chart showing the trend of this chain indicator over the last few years:
Looks like the value of the metric has been muted in recent days | Source: CryptoQuant
As you can see in the graph above, stablecoin inflows (top 10) to spot and derivatives exchanges have been shown separately, since spot platforms are what investors use to convert their coins.
It seems that when the Bitcoin bottom formed back in July 2021 during the mini-bear of that time, the spot exchange version of the metric rose sharply.
This implies that whales engaged in some heavy buying during that time with their stablecoin reserves, paving the way for a bullish reversal in BTC.
In recent weeks, the top 10 stablecoins of spot exchanges have not shown any significant movement, which means that whales are not providing any significant buying pressure yet.
If the recent trend is anything to go by, this could be an indication that the current Bitcoin bottom still hasn’t formed.
BTC price
At the time of writing, Bitcoin’s price is hovering around $16.8k, down 2% in the last week. Over the past month, the crypto has lost 18% in value.
The chart below shows the latest trend in BTC:
The value of the crypto seems to have declined during the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
