Quant Points Out Curious Relationship Between USDT Inflows & Bitcoin Price

A quant has explained using on-chain data that an interesting relationship may exist between the USDT exchange inflows and Bitcoin price. USDT Derivative Exchange Inflows May Be Influencing Bitcoin Price As pointed out by an analyst in a CryptoQuant post, many stablecoins entering into derivative exchanges have recently preceded a rise in the BTC price. [...]

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Bitcoin Exchange Inflows Fall To 2020 Levels As Activity Remains Low

Data shows the Bitcoin exchange inflows and outflows have both shrunk recently as market activity has remained low. Bitcoin Exchange Inflows & Outflows Continue To Decline As per the latest weekly report from Glassnode, the BTC inflow volumes are now only around $350-$400 million per day. The “exchange inflow” is an indicator that measures the total amount of Bitcoin currently being deposited to centralized exchanges by holders. Its counterpart metric is the “exchange outflow,” and it naturally tracks the volume leaving exchange wallets. Generally, during periods of high activity in the market, both these indicators rise to high values as a large number of investors make their respective moves. However, the price may react in particular directions depending on which of these metrics is higher at the moment. Since one of the main reasons why investors use exchanges is for selling purposes, inflows outweighing outflows could be bearish for Bitcoin. On the other hand, outflows being more dominant can suggest there may instead be buying pressure in the market as investors are withdrawing their coins for accumulation. Now, here is a chart that shows the trend in the Bitcoin exchange inflows and outflows over the last few years: looks like both these metrics have declined in recent weeks | Source: Glassnode's The Week Onchain - Week 2, 2023 As shown in the above graph, the Bitcoin exchange inflows and outflows were both at high levels during the past couple of years, with their volumes remaining in the range of multi-billion dollars throughout. At the peak of inflows back in May 2021, between $2.8 billion to $3.5 billion per day was entering exchange wallets. Related Reading: Is The Bitcoin Bottom In Yet? Here’s What aSOPR Metric Suggests Recently, however, both the inflows and the outflows have significantly declined. Currently, the inflow volumes are between $350 million to $400 million per day, which are lows not seen since 2020. The outflows haven’t quite shrunk to these levels yet, possibly because of the fact that the collapse of FTX lead to renewed interest in self-custody among investors, which made them withdraw large amounts from centralized platforms. In the chart, data for the Ethereum exchange flows are also displayed. It seems like before May 2021, the Bitcoin exchange flow dominance was about 70%, which means the combined volumes of Ethereum inflows and outflows made up for 30% of the total between ETH and BTC during the period. But since May 2021, the share of the Ethereum flows has significantly increased as ETH inflows and outflows dominance is now 42%. This trend suggests that the relative trading interest in ETH has gone up in the last one and a half years, while BTC has lost some mindshare. Related Reading: Ethereum 1-Month Realized Volatility Drops To Rare Level Seen Only Thrice In History Though, in pure numbers, both cryptocurrencies have seen very little market activity recently as both their exchange inflows and outflows are at pretty low values. BTC Price At the time of writing, Bitcoin is trading around $17,200, up 3% in the last week. The value of the asset seems to have surged in the last couple of days | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin Investors Haven’t Responded To Russia-Ukraine War With Large Inflows (Yet)

On-chain data shows Bitcoin investors haven’t moved large amounts to exchanges in response to the Russia-Ukraine war (at least for now). Bitcoin Exchange Reserve Doesn’t Spike Up Following The War Breakout Between Russia And Ukraine As pointed out by an analyst in a CryptoQuant post, the BTC reserve hasn’t moved significantly after the news of the Russia-Ukraine war. The “all exchanges reserve” is an indicator that measures the total amount of Bitcoin sitting in wallets of all exchanges. When the value of this metric rises, it means exchanges are receiving net inflows as investors deposit their coins. Such a trend is usually bearish for the price of the crypto as holders generally transfer their coins to exchanges for selling them. On the other hand, a falling reserve implies exchanges are observing more outflows at the moment. This kind of trend can be bullish as holders usually withdraw their coins for hodling purposes. Related Reading | Quant Explains How Bitcoin NUPL Can Help Predict Bull Cycles Now, here is a chart that shows the trend in the Bitcoin exchange reserve over the past few days: Looks like the value of the indicator hasn't seen any significant change over the last day | Source: CryptoQuant As you can see in the above graph, the Bitcoin exchange reserve hasn’t increased that much since the start of the Russia-Ukraine war. The price, though, has still observed a very sharp plunge down. This means that the majority of the sellers have to be those who were already keeping their coins on exchanges, planning in advance to sell them in case war broke out. Related Reading | What’s Intel CEO Pat Gelsinger Saying While Promoting The Bitcoin Mining Chip? Large inflows are common following big bearish news like this one. However, there haven’t been any such inflows yet. This would imply that those storing their coins in personal wallets haven’t panic transferred their Bitcoin to exchanges for selling, yet. The quant in the post believes that things may very well change in the coming hours, but for now, BTC hodlers outside the exchanges seem to be holding strong. BTC Price At the time of writing, Bitcoin’s price floats around $35.1k, down 18% in the last seven days. Over the past thirty days, the crypto has lost 12% in value. The below chart shows the trend in the price of BTC over the last five days. BTC's price seems to have crashed down over the past day | Source: BTCUSD on TradingView In the plunge that followed the war breakout between Russia and Ukraine, the price of Bitcoin touched as low as $34.4k before quickly jumping back a little and recovering to the current levels. Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin To Smash $100,000? Rapid Stablecoin Exchange Inflows Continue

On-chain data shows exchanges have continued to receive stablecoin deposits recently, a sign that could be bullish for Bitcoin and other digital assets. Stablecoin Exchange Netflow Has Remained Positive Recently As pointed out by an analyst in a CryptoQuant Quicktake post, stablecoins have been flowing into exchanges recently. The on-chain metric of relevance here is the “Exchange Netflow,” which keeps track of the net amount of a given asset that’s moving into or out of the wallets associated with centralized platforms. When the value of this metric is positive, it means the investors are making net deposits of the coin to exchanges. Such a trend suggests the holders want to trade the asset away. Related Reading: 54% Of Bitcoin Supply Inactive Since 2 Years Despite 500% Price Jump On the other hand, the indicator being negative implies investors prefer to hold onto the cryptocurrency, as they are taking their tokens off into self-custody. The implication of these trends for the wider sector and the asset itself can be different depending on the exact type of coin that’s witnessing the outflows/inflows. In the case of volatile assets like Bitcoin, a positive Netflow can be bearish for the price, as it means the holders are looking to sell. BTC also acts as one of the main transition points for capital in the sector as a whole, so it being sold can be a bad sign for the rest of the coins as well. Stablecoin deposits also imply traders want to sell them, but since their price always remains stable around the $1 mark, the selling has no ‘bearish’ effect on them. Like Bitcoin, the stablecoins act as a gateway for capital into the sector. More particularly, investors invest their money into the stables whenever they want to avoid the volatility associated with other assets. Such holders usually eventually plan to delve into the volatile coins, and once they are ready, they transfer these fiat-tied tokens into exchanges to make the swap. This naturally acts as buying pressure for whatever asset that they are shifting to. As such, positive stablecoin Exchange Netflows are considered bullish for Bitcoin. Now, here is the chart shared by the quant that shows the recent trend in the Exchange Netflow for the stablecoins: From the graph, it’s visible that the stablecoin exchange netflow has mostly been sitting inside the positive territory for the last few weeks. Alongside these inflows, Bitcoin has been breaking record after record, so it’s likely that these stablecoin deposits have been acting as fuel for the asset. Related Reading: Bitcoin Officially In Overheated MVRV Zone, Rally End Near? The indicator’s value has continued to show strength recently, so it seems the investors aren’t done with their BTC accumulation yet. If the earlier trend continues, the latest stablecoin inflows can elongate the rally and perhaps help the asset to finally break through the $100,000 dream target. Bitcoin Price Bitcoin had seen a plunge under the $96,000 level yesterday, but it appears the coin has already bounced back as its price is now trading around $98,400. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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XRP Binance Inflows Spike: What It Means For Price

On-chain data shows the XRP Binance Netflow has spiked to positive levels recently. Here’s what this could mean for the asset’s price. XRP Investors Have Been Depositing To Binance Recently As explained by an analyst in a CryptoQuant Quicktake post, a large amount of XRP deposit transactions have headed to Binance recently. The on-chain metric of relevance here is the “Exchange Netflow,” which keeps track of the net transfers going in or out of a given centralized exchange. The traditional form of this metric measures the difference between the inflow and outflow volume for the platform, but in the context of the current topic, a different version of the indicator is of interest: one that counts the net number of deposit/withdrawal transactions. When the value of the metric is positive, it means there are more inflow transfers happening for the exchange than outflow ones. As one of the main reasons why investors deposit to these platforms is for selling-related purposes, this kind of trend can be bearish for XRP. Related Reading: Cardano Outperforms Market With 50% Surge: Heres Why On the other hand, the indicator being negative implies withdrawals are dominant on the exchange. Such a trend can be a sign that holders are interested in HODLing into the long term, which can naturally have bullish effects on the price. Now, here is a chart that shows the trend in the 30-day moving average (MA) of the XRP Exchange Netflow for Binance over the last couple of years: As is visible in the above graph, the XRP Exchange Netflow for Binance has mostly stayed inside the positive territory during the last two years, which suggests investors have constantly been making withdrawal transactions. Recently, however, the metric appears to have diverged from the norm, as its value has registered a sharp positive spike. The asset has seen a sharp rally of over 54% in the past week, so it’s possible that the traders making the deposits are looking to sell and realize their profits. Now, the main question is, is this selling a potential threat to XRP’s value? The indicator is sitting at 470 right now, which suggests significantly more inflows than outflows. Considering that this is also just the 30-day MA, the peak value is bound to be even higher. Related Reading: Bitcoin Is About To See A Historically-Profitable Crossover In This Metric While this high number of inflow transactions may look like a danger at first glance, it may actually not be so, since it corresponds to activity that’s mostly from the retail investors. Whales don’t tend to leave behind too many transactions, as they prefer to move large amounts with a single transaction. Thus, whenever this version of the Exchange Netflow spikes, it’s a sign that the small holders are depositing. Naturally, there could still be a few whale transfers among these inflows, which can indeed end up having a negative effect on the XRP price. It only remains to be seen, though, which of the scenarios holds true. XRP Price XRP has pulled ahead of the rest of the market with a sharp rally during the past week, which has taken its price to $1.09. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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XRP Crashes 14% As Whales Send Deposits To Exchanges

The XRP price has registered a notable drop during the past day as on-chain data shows the whales have been making transactions to exchanges. XRP Has Witnessed A Sharp Drop Over The Last 24 Hours The cryptocurrency sector has been observing bearish winds recently, with the drawdown deepening across the market during the past day. Most of the top coins, though, have managed to limit their losses, except for XRP, which has notably underperformed. Related Reading: Dogecoin Crossover That Led To 90% & 180% Rallies Could Soon Form Again The below chart shows how the coin’s recent trajectory has looked like. Following the 14% drop in the last 24 hours, XRP has come down to the $0.52 level. This plunge has also put the asset more than 21% down compared to the $0.66 top that it had seen a few days back. As for why the cryptocurrency has performed this poorly during the past day, perhaps on-chain data can provide some hints. Whales Have Been Active On The Network Recently According to data from the cryptocurrency transaction tracker service Whale Alert, several large transactions have been spotted on the XRP network in the last 24 hours. All of these transactions happen to be of a scale that’s generally associated with the whales, who are large entities that can carry a degree of influence in the market. Naturally, one whale can’t move the market on their own, but some number of them together can, which may be exactly what has happened today. Generally, it can be hard to say for certain what the whales’ intentions are when they make moves, but address details can sometimes carry a hint or two. Here are the details of the first of the whale transfers from the past day: As is visible above, the whale moved 17,940,000 XRP, worth around $10.3 million at the time the transfer was executed, from an unknown wallet to an address connected to the cryptocurrency exchange Bitstamp. An “unknown wallet” is one that’s not affiliated to any known centralized platform and is likely to be an investor’s personal address. Thus, it would appear that the whale moved coins from their self-custodial wallet to an exchange with this transaction. Related Reading: Shiba Inu Leads Whale Frenzy: Large SHIB Transfers See Massive 360% Spike Transfers of this type are called exchange inflows. Since one of the main reasons why investors deposit their coins to these platforms is for selling-related purposes, large exchange inflows can lead to a bearish outcome. The three other XRP whale transactions from the past day were also of the same type, with whales shifting a combined $37.9 million to different platforms. It’s possible that these transfers weren’t for selling at all, but for using a different service that exchanges typically provide. Given the corresponding price trend, though, it’s indeed likely that these moves provided a net selling pressure to the cryptocurrency. Featured image from Dall-E, whale-alert.io, chart from TradingView.com

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Bitcoin Investors Watch Out: Miners Showing Unusual Exchange Inflow Activity

On-chain data shows the Bitcoin miners have been making an unusually high number of transactions to centralized exchanges recently. Bitcoin Miner To Exchange Transactions Metric Has Just Seen A Spike As pointed out by CryptoQuant author IT Tech in a new post on X, the Miner to Exchange Transactions indicator has been high recently. The “Miner to Exchange Transactions” keeps track of the total number of transfers that the miner-associated Bitcoin wallets are making to addresses connected with exchanges. When the value of this metric is high, it means the miners are making a large amount of moves to these platforms. As one of the main reasons why these chain validators would deposit to exchanges is for selling-related purposes, this kind of trend can have a bearish effect on the BTC price. Related Reading: Dogecoin Breaks Away With 9% Surge: Why This Could Trouble Bitcoin On the other hand, the indicator being low implies miners aren’t making inflows to exchanges, potentially because they plan to hold onto their coins for a while. Naturally, this HODLing from this cohort can be a positive sign for the asset. Now, here is a chart that shows the trend in the Bitcoin Miner to Exchange Transactions over the last few days: As displayed in the above graph, the Bitcoin Miner to Exchange Transactions has registered a large spike during the past day, suggesting that the miners have just made a large number of moves to these platforms. It’s possible that this is an indication of a selloff from these chain validators, but whether this potential selling would actually affect the cryptocurrency depends on the exact scale of coins that’s involved in the transactions. The analyst has also shared the data of an indicator that provides information related to it, called the Miner to Exchange Flow: From the chart, it’s visible that this metric’s value has also shot up alongside the spike in the Miner to Exchange Transactions. At its height, the metric touched 225 BTC, which is equivalent to a little under $15.4 million at the current price. This isn’t a small sum in itself, but when considering the scale of the total Bitcoin market cap, these exchange inflows hardly weigh to much. Thus, even if the miners plan to sell these coins, the market should be able to absorb the pressure just fine. Miners are entities that have constant running costs in the form of electricity bills, so they tend to be regular sellers. Most of the time, their selling remains limited, which would make the recent value of the Miner to Exchange Flow in line with the norm. Related Reading: Bitcoin Holders In Profit Hits 95%: Is BTC Overheating? The number of individual transfers to exchanges that the miners have made, however, is certainly unusual, so these indicators could be to keep an eye on in the coming days, in case more spikes pop up. BTC Price Bitcoin had surpassed the $69,000 level on Sunday, but the asset appears to have dropped back to $68,200 today. Featured image from Dall-E, CryptoQuant.com, chart from TradingView

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XRP Whales Are On The Move, What Are They Up To?

On-chain data shows the XRP whales have made some moves in the past day. Here’s what these humongous entities have been up to. XRP Whales Have Made Some Exchange-Related Transfers During Past Day According to data from the on-chain transaction tracker service Whale Alert, three large transactions have been spotted on the XRP network during the last 24 hours. The first of these transfers involved the movement of about 28.7 million XRP across the blockchain, worth around $14.7 million when the transaction went through. Related Reading: Bitcoin Miner Selloff Poses “Negligible Impact”, Quant Argues Given the scale of the move, it’s likely that a whale entity was behind it. Owing to their large holdings, the whales can be influential beings on the network, so their moves can be worth following, as they may cause noticeable fluctuations in the market. What a whale’s transfer may imply for the cryptocurrency depends on the intent behind it. Below are the details regarding this first XRP whale transfer, which may shed some light on its context. Looks like this transfer only needed a negligible fee of 0.000015 XRP to go through on the network | Source: Whale Alert As is visible above, the sending address in the case of this XRP whale transaction was an unknown wallet. At the same time, the receiver was an address attached to the cryptocurrency exchange Bitstamp. “Unknown wallets” refer to addresses unaffiliated with any known central entity. As such, they are generally the investors’ personal, self-custodial wallets. In this transfer, it would appear that the whale shifted their coins from their address to Bitstamp, suggesting they wanted to use one of the platform’s services. This can include selling, although it’s not a certainty. If the whale was looking to sell, the transfer could naturally have bearish consequences for the asset. Just like this transfer, the second one from the last 24 hours was also an exchange inflow, this time towards Binance. The second whale transaction from the past day | Source: Whale Alert This transaction involved an amount of 100 million XRP ($51.3 million), making it almost four times the size of the previous one. This may be a troublesome sign for the cryptocurrency if these whales sell here. However, the third and the latest of the whale transactions could offset a bit of negative effect (if any) that may arise out of these exchange inflows. The final large transaction from the last 24 hours | Source: Whale Alert Unlike the other two whale transactions, this is an exchange outflow transaction, going out of Binance and toward an unknown wallet. A closer inspection of the addresses involved reveals that the same Binance address took part in both this and the second transfer. Related Reading: These Crypto Asset Classes Could Be Future Market Drivers: Santiment This could suggest that the whale who made the large deposit to Binance has now made this withdrawal. The investor has only withdrawn 20.6 million XRP ($10.5 million), which is significantly less than the amount they deposited earlier. XRP Price XRP has dived around 5% in the past day, and the coin’s price is now floating around $0.5. Given this trend, it’s possible that at least some of the amount the whales deposited today was for selling. The price of the asset appears to have taken a plunge today | Source: XRPUSD on TradingView Featured image from Swanson Chan on Unsplash.com, chart from TradingView.com

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Ethereum Sees Inflows Of $505M Into Binance, Sign Of Selling?

On-chain data shows Ethereum has observed massive inflows of $505 million into Binance during the past day, a sign that selling may be going on. Ethereum Exchange Inflows Have Shot Up During The Past Day According to data from the on-chain analytics firm Santiment, this increase in the supply on exchanges is the largest observed [...]

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