• CryptoQuant notes two indicators that Bitcoin is due for some short-term sell pressure.
• Whale activity is rising on Bitcoin spot exchanges and the Exchange Whale Ratio has risen to 0.78 compared to roughly 0.5 last month.
• Approximately 12,310 BTC worth over $286 million have been flowing into spot exchanges, demonstrating potential liquidity issues that may generate downward price pressure.
Bitcoin Withdraws Toward $23k
Bitcoin has recently been withdrawing towards the $23k mark, according to blockchain analytics firm CryptoQuant who noted two data points to consider while monitoring the asset’s future short-term price action.
Rise in Whale Activity
Analysts for CryptoQuant found that some large players appear to be topping up the market with sell pressure – including Bitcoin miners. The Bitcoin Exchange Whale Ratio – a metric comparing the top 10 Bitcoin transactions flowing into exchanges to the total number of exchange inflows – rose to 0.78 as of March 1st, compared to roughly 0.5 last month. According to analyst abramchart, this high ratio suggests “large inflows” which could lead to selling pressure in the near future.
The number of Bitcoin flowing into spot exchanges as of Monday was approximately 12,310 BTC – worth over $286 million at current prices and on Wednesday, inflows were about 10,588 BTC. Generally speaking, crypto flowing into exchanges is seen as an indication that investors are looking to liquidate their crypto assets which can generate downward price pressure.
Out of 6 respondents surveyed by CryptoQuant regarding these data points 4 interpreted it as bearish, suggesting a possible increase in sell pressure for Bitcoin in the near term future if current trends continue or worsen.
As such it appears that investors should be prepared for some volatility from Bitcoin in the coming days and weeks ahead as these data points suggest potential liquidity issues which could drag down its value in short-term trading scenarios