Bitcoin Outflows Ramp Up
For the past week, the price of bitcoin has been on an uptrend. This recovery which had started on Monday had raged on through the week, seeing the digital asset finally break above $47,000 for the first time in three months. Speculations have abounded in the space since then as to how long recovery like this can last. As such, investors will look to metrics like exchange inflows and outflows to determine if investors are buying or selling.Related Reading | Why The Latest Correction Is Good For Bitcoin
Data like this suggests that investors are selling less than they are buying. Given that such high volumes are leaving the exchanges, it is expected that investors prefer to accumulate their coins during this time rather than sell. Therefore, since more BTC is being removed from exchanges than that moved to be sold, there is less supply in the open market, causing fewer coins to be available for demand, leading to a higher value.🚨 Weekly On-Chain Exchange Flow 🚨
— glassnode alerts (@glassnodealerts)
➡️ $7.9B in
⬅️ $9.5B out
📉 Net flow: -$1.5B
➡️ $5.1B in
⬅️ $6.8B out
📉 Net flow: -$1.7B (ERC20)
➡️ $4.9B in
⬅️ $4.4B out
📈 Net flow: +$451.8M
Tether Shows Better Metrics
Bitcoin’s net flows are not the only thing that suggests that the rally is just in its beginning stages. Now, Tether (USDT) has the largest pairing of any other cryptocurrency in the market with bitcoin. This usually provides a direct correlation with how investors are moving their Tether in and out of the exchanges to bitcoin’s price.BTC drops to $46K | Source:For the last week, had ramped up too. A total of $4.4 billion in inflows were recorded while there was a total of $4.9 billion Tether moved to exchanges. It is presumed that such volumes being moved to the exchanges are for the purposes of purchasing cryptocurrencies like bitcoin.
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Given this and the fact that bitcoin exchange outflows keep growing, there is still significant buy pressure in the market. Coupled with the accumulation trend among bitcoin investors, bitcoin may only be starting out on this rally.Featured image from The Financial Commission, chart from TradingView.com