Bitcoin Turns Bearish As Whales Sell-Off On Gemini
On-chain data may suggest huge Bitcoin inflows to crypto exchange Gemini might be the reason behind the recent dip.
Huge Bitcoin Inflows To Crypto Exchange Gemini
As pointed out by a CryptoQuant post, these BTC inflows to Gemini might be the reason for the current downwards trend in the crypto’s price.
The Bitcoin inflow is an indicator that shows the amount of BTC transferred into exchange wallets. The opposite metric is called the outflow.
The difference between the inflows and outflows gives the exchange netflow. When this indicator’s value is positive, it means inflows are outweighing outflows.
While on the otherhand, if the netflow is negative, it implies more Bitcoin is moving out of exchanges than in. Now, here is a chart for the BTC Gemini netflow:
Gemini received huge inflows shortly before the price dip | Source: CryptoQuant
As the graph shows, the BTC price started moving down as soon as Gemini started noticing negative spikes in the netflow.
The reason behind the dip is that big inflows mean whales are sending their coins to the exchange for selling purposes/altcoin purchasing.
Related Reading | S2F Creator Beckons Beginning Of Second Leg Of Bitcoin Bull Run
However, as the graph shows, big inflows aren’t the only necessary condition for the price to go down. There are two other indicators that influence the price, namely the BTC spot reserves and the stablecoins issued metric.
The spot reserves is the total amount of Bitcoin in wallets of all exchanges. If the value of this indicator moves up, it means exchanges across the board are noticing large inflows.
On the contrary, if the spot reserves move down, it means exchanges are overall observing higher outflows. Looking at the above chart, spot reserves moving up seems to cause a drop in the price, as expected.
Related Reading | Could The New “China Model” Be The Reason The Country Banned Bitcoin Mining?
The graph also shows that if Gemini receives large inflows while the spot reserves go down, the price isn’t negatively affected. Similarly, large amounts of stablecoins being issued also seems to cause a similar effect.
BTC Price
At the time of writing, Bitcoin’s price is around $44k, up 8% in the last 7 days. Over the past month, the cryptocurrency has amassed 34% in gains.
Below is a chart showing the changes in the coin’s value over the past three months:
BTC’s price seems to be crashing down | Source: BTCUSD on TradingView
After peaking not too far from the $47k price mark, Bitcoin seems to be sharply moving downwards. As explained above, this could be related to the inflows to Gemini.
Some signs still seem to be bullish for the crypto so it’s hard to say which direction it will go in next. However, if such inflows continue, there could be a bear market ahead.
Source: Read Full Article
