Bitcoin On-Chain Data Shows Decrease In BTC Outflows, Crash Incoming?
October 19 2021 - 02:00PM
NEWSBTC
Bitcoin on-chain data shows that the BTC outflows have been
gradually heading downwards recently, hinting that a crash could be
coming soon. On-Chain Data Shows BTC Outflows Continue To Decrease
As pointed out by an Analyst on Twitter, on-chain data reveals
Bitcoin outflows have been gradually going down in the past month.
The relevant metric here is the BTC netflows. This indicator shows
the net amount of coins exiting or entering exchange wallets. Its
value is calculated by taking the difference between the inflows
and the outflows. When the netflow shows negative values, it means
outflows are dominating inflows. This means more Bitcoin is being
pulled off exchanges than the amount being put in. Sustained such
values have usually been bullish for the crypto. Positive values,
on the other hand, would imply an increase in coins entering
exchanges as inflows show more strength than outflows. This can be
bearish for BTC’s price. Related Reading | Bitcoin Price
Smashes Record For Highest Weekly Candle Close Ever Now, here is a
chart that shows the trend in the value of the BTC netflows over
the year: BTC's outflows seem to be decreasing | Source: Glassnode
As the above graph shows, Bitcoin saw significant outflows over the
last couple of months, but lately they have started slowing down.
It seems that during the 2021 bull run, outflows were seen for much
of the period. Once netflows started turning green (that is,
investors started sending their coins to exchanges for selling),
the price crash happened. If outflows keep going down like they are
right now, the indicator might turn back green again. This could
lead to another price crash happening soon. Related Reading
| The On-Chain Metric That Says Bitcoin Is About To Go
“Parabolic” However, it should be noted that the netflows became
similarly neutral at many points during the last bull run, but no
major correction came. So it remains to be seen if this time the
indicator will turn positive or not. Bitcoin Price At the time of
writing, BTC’s price floats around $62k, up 9% in the last seven
days. Over the last month, the crypto has gained 31% in value. The
below chart shows the trend in the price of Bitcoin over the last
five days: BTC's price shows a rather sideways movement over the
last few days | Source: BTCUSD on TradingView After a September
filled with multiple crashes, Bitcoin has made some big moves up in
this month of October as the crypto is now very close to making a
new all time high (ATH). It’s unclear where the coin might head
next, but if the netflows start turning positive, a crash could be
coming soon. Featured image from Unsplash.com, charts from
TradingView.com, Glassnode.com
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