At the same time, the net flow across all exchanges is positive, increasing by 15,800 BTC. These changes mark a reversal of the continued outflow trends observed in previous weeks, suggesting that traders may be preparing for increased exchange activity.
At the same time, the net flow across all exchanges is positive, increasing by 15,800 BTC. These changes mark a reversal of the continued outflow trends observed in previous weeks, suggesting that traders may be preparing for increased exchange activity.
Detailed growth in foreign exchange reserves and positive net flows
When the Bitcoin reserves on exchanges increase, it generally indicates an intention to trade or sell, which may bring selling pressure. Similarly, positive net inflows indicate that the amount of Bitcoin flowing into the exchange exceeds the withdrawals.
Bitcoin exchange reserves. | Source: CryptoQuant
Historically, this pattern is usually associated with periods of increased market volatility. While the long-term accumulation trend remains unchanged, these new inflows underscore a short-term shift in market sentiment, indicating that investors may be preparing for profit-taking or potential price adjustments.
IT Tech wrote:
If reserves and net inflows continue to increase, we may see volatility in Bitcoin prices and potential downward pressure in the short term. This reversal underscores the importance of monitoring exchange activity to detect early signs of changes in market sentiment.
Another indicator suggesting increasing buying pressure for Bitcoin
Although there are signs that price movements are imminent, another CryptoQuant analyst, Burak Kesmeci, emphasized a key observation to the contrary: Bitcoin taker buy volume on Binance has surged to $8.3 billion.
Bitcoin Taker buy volume on Binance. | Source: CryptoQuant
This metric tracks the total buy trades executed by 'takers' on Binance, i.e., market participants buying BTC at the current market price using existing liquidity. An increase in Taker Buy Volume is typically interpreted as a sign of increased investor interest and buying pressure.
Binance Bitcoin Taker buy volume reaches $8.3 billion!
"We have observed that Binance Taker buy volume has formed higher lows. This indicates that investor interest is increasing, and buying pressure is intensifying @burak_kesmeci.
Link 👇https://t.co/axZopFuK0v pic.twitter.com/POtTGvcxrY
— CryptoQuant.com (@cryptoquant_com) December 26, 2024
Kesmeci noted that over the past 60 days, Binance Taker buy volume has been forming higher lows. This trend indicates that despite occasional market pullbacks, buying activity remains persistent.
The continued increase in Taker Buy Volume indicates that demand remains strong, which could drive up Bitcoin prices in the short term. Kesmeci stated:
Despite the market potentially overheating and experiencing corrections, the continued rise in Taker buy volume suggests that we may see an increase in Bitcoin's price in the coming days.