Is Bitcoin Rise Above $20k Sustainable? Here’s what On-Chain Data says
Bitcoin is now back above the $20,000 mark after observing a sharp uptrend in the last day, but is this pump sustainable? Here’s what on-chain data has to say about it.
Bitcoin Online flows for all exchanges remain muted after the price surge
As explained by an analyst in a CryptoQuant post, the BTC exchange network flows can help us know whether this short-term uptrend is sustainable or not.
“All Exchange Net Flow” is an indicator that measures the net amount of Bitcoin entering or exiting wallets from all centralized exchanges. The metric’s value is simply calculated by taking the difference between the inflows and outflows.
When the indicator has a positive value, it means that investors are depositing a net number of coins to exchanges right now. Since these holders can send BTC to exchanges for selling purposes, this kind of trend can have bearish implications on the price of the crypto.
On the other hand, negative values of the net flow suggest that the outflows are currently overwhelming the inflows. Such a trend, when extended, can be bullish for the coin as it can be a sign of accumulation by holders.
Now, here’s a chart showing the trend in Bitcoin all exchanges’ online flow over the past couple of weeks:
Looks like the value of the metric saw a spike about a week ago| Source: CryptoQuant
As you can see in the graph above, only the positive scale of the Bitcoin exchange’s online flow is shown, as it is a sufficient enough metric in the context of the current price discussion.
It seems that there have been no significant spikes in the value of the indicator since the crypto observed the pump. This means whales have not deposited any coins for dumping yet.
Just a week or so ago, there was a pretty big positive net surge, shortly after BTC bounced back from its small rally.
So far, Bitcoin has not seen any such inflows, suggesting that the rise may continue in the near term. However, it remains to be seen how long the whales will continue to sit still.
BTC price
At the time of writing, Bitcoin’s price is hovering around $20.5k, up 7% in the last seven days. Over the past month, the crypto has increased 9% 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 sharply risen up over the past 24 hours | Source: BTCUSD on TradingView
Featured image from Jievani Weerasinghe on Unsplash.com, charts from TradingView.com, CryptoQuant.com
