When the value of the metric goes up, it means more BTC is currently exiting exchanges. Such a trend has usually been bullish as holders usually withdraw their coins to personal wallets for hodling purposes. Prolonged large outflows can be a sign of whale accumulation.
On the other hand, when the indicator’s value stays low, it implies not many investors are moving their Bitcoin off exchanges at the moment.
This trend can be bearish if the opposite metric, the inflow, spikes up. This is because holders usually deposit to exchanges for withdrawing to fiat or for purchasing altcoins.
According to the quant, this trend might show that the $40k price level is important to some investors. Whenever the crypto approaches a support level, outflow spikes like these usually occur as holders are keen to buy more as Bitcoin’s value dips to such levels.
At the time of writing, Bitcoin’s price floats around $43.8k, up 2% in the last seven days. Over the past month, the crypto has lost 12% in value.
The below chart shows the trend in the price of BTC over the last five days.
After weeks of trending downtrend, Bitcoin finally seems to have shown some solid movement up as the crypto broke past the $44k mark several times in the past day.
The move may have been fueled by the recent uptick in the exchange outflows. It’s unclear at the moment if this is the rally that will help the crypto escape from the $40k to $45k range. Nonetheless, it’s some upwards momentum for the coin at last.
Featured image from Unspash.com, charts from TradingView.com, CryptoQuant.com