Bitcoin

Bitcoin inflows reach highest point since Black Thursday


Bitcoin rebounded from above $20,000 price zone. At the time of writing, Bitcoin is trading at $32,475 with increased volatility over the past few days.

BTC is bouncing back to the previous support on the daily chart. Source: BTCUSD TradingView

The bulls had a hard time during May and June, as bears dominated the price action as selling pressure increased across all exchanges.

With Bitcoin moving to the important support at $29,000, CryptoQuant recorded a spike in BTC flows to the exchange. As the image below shows, the last time BTC entered the exchange was in March 2020, when the price of BTC dropped just below $4000, on the Black Thursday.

Bitcoin BTC BTCUSD
Source: CryptoQuant

In addition, CryptoQuant recorded a 7-day moving average of net spot exchange flows that turned positive. The last time this scale was at similar levels, The distribution of the bitcoin experience is in the $50,000 range.

Bitcoin BTC BTCUSD
Source: CryptoQuant

Many merchants were skeptical about the authenticity of the quantity BTC flows into the exchange as a suitable metric to predict a path in price movement Some believe that whales can easily manipulate the market by sending BTC to these exchanges and take advantage of the fear that investors are experiencing.

However, CryptoQuant CEO Ki-Young Ju Believes This kind of “psyops is almost impossible”. The platform uses a mechanism to measure exchange flow data by the number of transactions. Thus, they compute their data by looking at aggregated flows and not a single transaction.

This is why we need to see aggregated streams rather than a single transaction like Whale Alert. Whales can easily manipulate each transaction. To corrupt our data, whales need to send more than 10,000 bitcoins, but most of the large transmissions are internal transfers from exchanges.

Young-joo added that the only way to make this data inaccurate is for the whales to coordinate their transactions. In this way, exchanges will receive tens of thousands of bitcoin inflows, and “the data will be corrupted.” Young Joo added:

(…) But that has not happened yet. It’s very expensive and dangerous for security reasons, so I think whales can’t do this organized effort

Bitcoin Bear Market confirmed?

In a separate tweet, the CEO of CryptoQuant claims that Bitcoin has “confirmed” a Bear market trend. He based his statement on the large amount of bitcoin inflows into the exchange, as shown by the platform’s whale capitulation index.

BTC BTCUSD
Source: CryptoQuant

When whales start selling BTC in such amounts, the price tends to the downside, as the CryptoQuant chart indicates. However, Young Joo said that investors should not rely on a single indicator to predict price movement.

Young Joo received some critics for this statement. Economist and cryptocurrency analyst Michael van de Poppe responded to this claim: “I don’t see any correlation” between Bear Market flows and BTC. Later, the executive explained:

To be clear, I expect that my bearish bias for bitcoin in dollars won’t last long (maybe only a few weeks) because the market looks good in terms of long-term supply/demand (eg Stablecoins (USD) and SSR ratio). So don’t get me wrong, I’m not saying it’s over.





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