The relevant indicator in this on-chain observation is the Exchange Inflow metric, which tracks the volume of an asset (in this case, Bitcoin) that flows to centralized exchanges within a specified period. This metric is often important because one of the prominent exchanges’ service offerings is selling.
Ultimately, this recent spike in exchange inflows explains the volatility experienced by the price of Bitcoin on Friday. The flagship cryptocurrency succumbed to significant bearish pressure, seeing its price fall to just above $80,000 as the weekend approached.
As of this writing, the price of BTC stands at around $86,070, reflecting an over 2% jump in the past 24 hours.
With the current reading of the PnL Index Signal, Ju proclaimed that the classic cycle theory says that BTC is entering a bear market. According to the CryptoQuant CEO, only macro liquidity can override the profit-taking cycle—just as seen in 2020.
Hence, all eyes will be on the Federal Open Market Committee (FOMC) meeting in December, especially with the falling expectations of an interest rate cut by the US Federal Reserve (Fed).
