With less inflow and outflow of Bitcoin at crypto exchanges, there seems to be a pause from traders, keen on reaping profits from price movements. The calm seems to emanate from low volumes recorded in June and July.
Exchange Inflow and Outflow Volume For BTC On Par
Per a recent report from analysis firm Delphi Digital, the amount that traders have sent to major crypto exchanges is now at par with assets being taken off the exchanges.
“It’s clear there were significant net outflows during the big rally in the second quarter of 2019, as bullish sentiment started picking up and individuals were moving Bitcoin off exchanges because they had no intention of selling in the immediate future,” said the firm.
Delphi Digital further noted that 42% of Bitcoin inflows went to Binance.
“The relationship between Bitcoin price and flows is pretty apparent. Price rallies were typically accompanied by sizable inflows to exchanges as individuals looked to take profit,”
said Delphi Digital.
Interestingly, Coinbase, Bitflyer, and Bitstamp recorded great gains in 2019 Coinbase’s and bitFlyer’s volume is up nearly three times compared to January. On the other hand, Bitfinex and Bittrex have shown abysmal gains, approaching the same volume as at the bottom of the bear market.
Larry Cermak, a famous crypto researcher also explained that spot trading volume has served as a lagging indicator of price. This implies that as the prices increase, more people start trading and thus the volume goes up. Interestingly, August seems to have a massive discrepancy in the last three years.
“A break Out Above $11,000-$11,200 Range Could be A Catalyst”
Analysts further noted that inflow of Bitcoin can be indicative of significant selling pressure. Interestingly, this was the case in early July, when Bitcoin prices dropped significantly after crypto exchanges received lots of deposits in Bitcoin.
“A breakout above the $11,000 – $11,200 range for BTC could be the catalyst for another strong move higher. Conversely, a break below ~$9,400 may signal more pain ahead in the near term, though we’ve seen significant buying pressure in this range, evident in Bitcoin’s quick bounce off these levels in mid-to-late July and the end of August,” said the firm.
In August less Bitcoin was sent to exchanges, however, no immediate impact on the price was seen. Bitcoin’s extended period of price consolidation and “parabolic” run at the end of June indicates a significant price move.
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Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com