Exchange Flow Multiple (30D/365D) is an indicator that shows the ratio between short-term (30-day) and long-term (365-day) inflows and outflows of BTC on exchanges.
When the Exchange Flow Multiple declines, it means that short-term inflows and outflows on exchanges are significantly lower than long-term ones. A low Exchange Flow Multiple points to decreased volatility in Bitcoin exchange flows, which could reflect accumulation by investors.
As seen on the chart, the Exchange Flow Multiple is currently near its lowest point this year. This significant decrease in the indicator may be due to several factors:
1) Long-term investors, or "HODLers", continue to hold their assets, which leads to a decrease in trading volume on exchanges. This scenario is typical of the early stages of a bull market, when more experienced participants prefer not to exit their positions, expecting further price increases.
2) Market correction and recovery. After each significant price drop or correction in BTC, markets require time to recover, which can also manifest in reduced exchange activity. A low Exchange Flow Multiple may indicate that active investors are waiting for prices to stabilize before resuming active trading.
On the chart, it is noticeable that low Exchange Flow Multiple values were observed before the rally in 2023. The current indicator levels are similarly low, which could signal that the market is preparing for the next upward trend.
Follow my channel on X https://x.com/axeladlerjr, where I provide daily analyses of the premier cryptocurrency. Also, consider subscribing to my Substack https://adlerscryptoinsights.substack.com, where you will find a weekly in-depth analysis of Bitcoin.
AAJ.
Written by AxelAdlerJr
