On-chain data shows exchanges have received heavy Bitcoin inflows over the last couple of weeks, a potential factor behind the asset’s bearish action.
When the value of this metric rises, it means the holders are depositing a net number of tokens to these platforms. As one of the main reasons why investors transfer to exchanges is for selling-related purposes, this kind of trend can have a bearish effect on the coin’s value.
Now, here is the chart shared by the analyst that shows the trend in the Bitcoin Supply on Exchanges over the past few weeks:
As displayed in the above graph, the Bitcoin Supply on Exchanges has been on the way up recently, implying that the investors have been making net inflows. In total, the holders have transferred 20,000 BTC into the wallets of these platforms over the last two weeks. At the current exchange rate, this amount is worth a whopping $2.2 billion.
The timing of these deposits has come alongside the cryptocurrency’s price decline, so it’s likely that a lot of these were made with the intention to sell.
In the same chart, Martinez has also attached the data of the Exchange Inflow, which shows all inflows going to these platforms, not just net inflows. This metric registered a huge spike during the weekend, after which BTC extended its decline.
Interestingly, the Supply on Exchanges didn’t see any increase with this large spike, indicating that there was enough demand for withdrawing the cryptocurrency that balanced out the deposits.
The STHs are made up of the weak hands of the market, so it’s not surprising to see them capitulate during price declines. In fact, large loss-taking spikes from them help Bitcoin find bottoms as their coins transfer to more resolute entities.
At the time of writing, Bitcoin is trading around $110,500, down over 2.5% in the last week.
