With the crypto market’s decline, there have been a number of things that have changed drastically in the space. Mostly, investors have been rushing to get out of the market before the crash takes more of their funds. What this has led to has been a significant increase in the number of cryptocurrencies that are flowing to exchanges. Most notably have been Bitcoin and Ethereum, whose daily exchange inflows have touched billions of dollars.
Billions In Crypto To Exchanges
The data for the last 24 hours shows that the amount of funds that are being transferred into centralized exchanges is up over the last week. Instead of the sub-$1 billion figures that have usually been recorded, the volume has ramped up significantly.
Glassnode reports that more than $3 billion in Bitcoin had moved into exchanges over the last 24 hours. In total, there was $3.2 billion worth of BTC recorded to have flowed into exchanges, with $3.3 billion flowing out, leading to a negative net flow of -$103.5 million.
Related Reading | More Than 253,000 Traders Liquidated As Crypto Bloodbath Continues
The same was the case with Ethereum which had also seen $2.1 billion flowing in while $1.5 billion had flowed out. The positive net flow of $532.4 million for Ethereum is in line with the outflow trend that had been recorded for the digital asset over the last couple of months.
Interestingly, although high, the numbers for the last 24 hours are almost 50% below what was recorded on Sunday. This is understandable given that the majority of the market crash had happened in the late hours of Sunday, thus causing investors to want to move their funds.
Total market cap below $1 trillion | Source: Crypto Total Market Cap on TradingView.com
To put this in perspective, Sunday had seen $6.5 billion worth of bitcoin flow into centralized exchanges, while Ethereum’s numbers had clocked as high as $3.7 billion in the same time period.
🚨 Weekly On-Chain Exchange Flow 🚨#Bitcoin $BTC
➡️ $6.5B in
⬅️ $6.5B out
📉 Net flow: -$9.9M#Ethereum $ETH
➡️ $3.7B in
⬅️ $3.5B out
📈 Net flow: +$181.6M#Tether (ERC20) $USDT
➡️ $3.5B in
⬅️ $3.2B out
📈 Net flow: +$339.4Mhttps://t.co/dk2HbGwhVw
— glassnode alerts (@glassnodealerts) June 13, 2022
Tether Outflows Says No Accumulation
Tether is the largest of the stablecoins and possesses the largest range of crypto trading pairs that are present in the market. Its inflow and outflow trend has often helped to know if crypto investors were looking to purchase coins or were in fact dumping their coins.
Related Reading | Bitcoin Drops To 18-Months Lows, Has The Market Seen The Worst Of It?
The Tether inflows and outflows for the last two days show that instead of trying to accumulate, investors are heading for the safety provided by these stablecoins. On Sunday, USDT inflows were slightly above outflows, which does not spell good news for the crypto market. This trend has now continued as the last 24 hours have now seen inflows matching outflows.
What this indicates is that investors are not buying up bitcoin or Ethereum. Rather, they are converting their cryptocurrencies into stablecoins to escape the extreme volatility of the current market.
Featured image from Forbes India, chart from TradingView.com
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Bitcoin: On-chain metrics to consider in this bear cycle before going…
The crypto market has had quite a ride this month after bearish waves struck down major cryptocurrencies. The global crypto market capitalization also fell below $1 trillion leading to failing crypto institutions such as 3AC and Celsius. Bitcoin also suffered heavy drawbacks during the period.
BTC reached its lowest levels since December 2020 after dropping below $17,750. Starting the month at around $32,200, the largest-sized crypto has taken a lot of heat and at press time, it was trading at $21,000. The king coin was up by more than 2% in the past day and was just down 0.05% during the week. This was a good signal of recovery after treading through bearish downturns early in June.
Nearing market bottom
On-chain data analytics platform CryptoQuant released the latest update surrounding Bitcoin. It stated that the current BTC price is undervalued. Most on-chain indicators indicate that we are close to a market bottom for Bitcoin.
BTC’s indicator of Net Unrealized Profit/Loss was hovering around -0.06, at press time. This is the initial signal for nearing a market bottom. In the latest crypto crash, there were many addresses that recorded losses when BTC reached the 18-month bottom of $17,744.
According to CryptoQuant, the MVRV ratio has fallen significantly during the current run. At press time, it was estimated at around 0.93, suggesting an undervaluation of BTC.
There was, however, a little spike in Miner’s Position Index but it was still estimated at -0.6. This means that miners are circulating more than their daily distribution in the moving average of the YTD.
Miners have also increasingly offloaded their holdings to exchanges. This can indicate that some miners’ revenue cannot meet the break-even point.
For many investors, this is a good time to start accumulating again if they want to recoup their losses. With the regulatory proposal for digital assets already in place in the United States, there is still hope for a bullish surge in the coming months.
Bitcoin Whale Presence On Derivatives Still High, More Volatility Ahead?
On-chain data shows Bitcoin whales are transferring large amounts to derivatives exchanges right now, a signal that more volatility could be ahead for the crypto.
Bitcoin All Exchanges To Derivatives Flow Continues To Show High Value
As explained by an analyst in a CryptoQuant post, BTC whale activity on derivatives exchanges still seems to be high.
The relevant indicator here is the “all exchanges to derivatives exchanges flow,” which measures the total amount of Bitcoin moving from spot exchange wallets to derivatives.
When the value of this metric spikes up, it means whales are currently moving a large number of coins to derivatives exchanges right now.
Such a trend usually occurs around lows in the price of the crypto as whales look to get themselves long positions.
Related Reading | Bitcoin Recovery Slows Down As Whale Inflows Remain Elevated
On the other hand, low values of the indicator show whales aren’t moving much coins to derivatives at the moment. This kind of trend has historically lead to tops in the value of the coin.
Now, here is a chart that shows the trend in the Bitcoin all exchanges to derivatives flow over the last couple of years:
Looks like the value of the metric has been quite high recently | Source: CryptoQuant
As you can see in the above graph, the Bitcoin spot to derivatives flow has spiked up recently, suggesting that whale activity is pretty high right now.
In fact, the current value of the indicator is actually the highest ever in the history of the cryptocurrency, implying there is an all-time high rate of whales on derivatives currently.
Historically, the price of the crypto has observed significant volatility whenever the metric’s value has been elevated.
Based on this trend, the quant believes that the value of the coin could still see further fluctuations in the near future.
The analyst also notes that a reduction in the all exchanges to derivatives flow will need to be there, for the volatility to die down.
At the time of writing, Bitcoin’s price floats around $21.1k, up 4% in the last seven days. Over the past month, the crypto has lost 27% in value.
The below chart shows the trend in the price of the coin over the last five days.
The value of the crypto seems to have surged up over the last couple of days | Source: BTCUSD on TradingView
After hitting a low of below $18k a week ago, Bitcoin has been trying to recover. So far, the crypto has managed to break above $21k again, but it’s yet unclear whether this recovery will last.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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I’m Tony Spilotro. Behind the pseudonym, I’m a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck – literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn’t yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can’t yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.
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