Bitcoin on-chain data shows that crypto exchange Binance saw large inflows of nearly 10,000 BTC yesterday.
Bitcoin Netflow shows huge positive surge as 10,000 BTC enters Binance
As one analyst pointed out in a CryptoQuant post, BTC netflow had a major positive surge yesterday, a sign that is usually bearish for the price.
The “netflow of all exchanges” is an indicator that measures the net amount of bitcoin entering or leaving wallets of all exchanges. The value of the metric is calculated simply by taking the difference between the inflows and the outflows.
If the indicator shows positive values, it means that there are currently more inflows than outflows. Such a trend is often bearish, as investors usually deposit their bitcoin for sale purposes.
On the other hand, if the value of the metric is negative, it means outflows are overwhelming inflows as a net amount of BTC exits exchanges. This type of trend can be bullish for the price of the crypto as holders are generally withdrawing their coins to hold them.
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Now here is a chart showing the trend of bitcoin netflow over the last few months:
It looks like the value of the metric has recently shown a huge positive increase | Source: CryptoQuant
As you can see in the chart above, Bitcoin netflow yesterday showed that almost 10,000 BTC entered exchanges in an hour yesterday.
Looking at the chain data shows that these inflows went to Binance. Interestingly, just a few hours later, crypto exchange Gemini observed an outflow of around 10,000 BTC, canceling out those inflows and returning the net flow to neutral.
The negative spike offsets the positive from a few hours earlier | Source: CryptoQuant
As mentioned earlier, inflows for the price of bitcoin are usually declining. However, as outflows of the same magnitude occurred only a few hours later, the net outflows became practically neutral.
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Now, outflows can be bullish for price if done for the purpose of accumulation. But that doesn’t have to be the case. If the investors behind the pullback intend to sell them through OTC deals, the impact on the price may be bearish instead.
At the time of writing, Bitcoin’s price is hovering around $36.8k, down 12% over the past seven days. The graph below shows the evolution of the value of the coin over the last five days.
BTC’s price has retraced much of the recovery it’s made over the past few days | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradignView.com, CryptoQuant.com