On Saturday, December 19, Bitcoin (BTC) surged past $24,000 levels but has been moving sideways since then and is currently flirting around $23,500. However, the party doesn’t seem to end anytime soon.
Crypto analyst King Young Ju points out that USDC whales have been making massive deposits at the Coinbase exchange. He notes that whenever this happens, Bitcoin (BTC) price continues to rally further.
Whenever these whales deposits to Coinbase, the $BTC price is likely to go up.
There are deposits from USDC whales recently. I think it could be one of the bullish signals.
— Ki Young Ju 주기영 (@ki_young_ju) December 20, 2020
The analyst notes that Coinbase has registered a large number of OTC deals since mid-2020. A majority of the OTC deals are made by institutional investors or high-net individuals. He notes that most of these investors have been using the dollar-pegged Coinbase stablecoin.
On Friday, December 18, Ki-Young Ju explained how several on-chain indicators lead us to estimate the OTC deals. He points out at massive BTC outflows on Coinbase around 6000-8000 BTC that usually leads to the crypto going to cold wallets. “If Coinbase moves a significant amount of Bitcoins to other cold wallets, it would indicate OTC deals,” he notes.
He also highlights some recent OTC deals at the exchange. Last week, British investment giant Ruffer LLC confirmed that it purchased $700 worth of Bitcoin (BTC) via Coinbase, in November 2020. Similarly, the Grayscale Bitcoin Trust (GBTC) has been accumulating a massive quantity of BTC through Genesis Trading which in turn uses the Coinbase OTC desk.
The Fund Flow Ration and Tokens Transferred
Pointing at other on-chain indicators, the analyst explains how the fund-flow ratio helps to determine large OTC deals.
2/ Fund Flow Ratio for all exchanges
Fund Flow Ratio for all exchanges is the ratio of network transaction volume of exchanges among the entire tokens transferred on the network.
If this value goes up, it implies most of the network TXs are exchange deposits/withdrawals. pic.twitter.com/6ZqilAWhdl
— Ki Young Ju 주기영 (@ki_young_ju) December 18, 2020
In another case, a majority of the transactions are coming from non-exchange wallets and most of these are OTC deals which is a bullish indicator. The last indicator to predict OTC deals is token transfer. He notes:
“Tokens Transferred is the number of Bitcoins transferred on the network. If this value goes up and the fund flow ratio for all exchanges goes down, it implies that huge OTC deals are on-going”.
The slowdown in USDT Borrowing Suggest Short-Term Correction
While Ki-Young Ju points at the USDC deposits at Coinbase, Alex Mashinsky – founder or crypto wallet Celcius Network – hints at drying up of USDT. He thus suggests waiting a bit before chipping-in in the recent FOMO.
Buying BTC at these levels? Be careful, after $1B in short position liquidations and Bitcoin being the topic of the day on every news channel many buy BTC on margin. We see a slowdown in USDT borrow which will lead to lower prices so pause to give yourself better entry point.
— Alex Mashinsky ©️ (@Mashinsky) December 20, 2020