On-Chain Data Shows Why Bitcoin Falls to $59,000
In the last day, Bitcoin's price has dropped to about $59,000. Here's what on-chain data suggests might be the reason behind it.
Excessive Inflow Into Bitcoin Exchanges Prior to Crash
The most recent development in Bitcoin exchange inflow was covered by CryptoQuant Head of Research Julio Moreno in a recent X article. Centralized exchange wallets may keep tabs on the overall quantity of assets being exchanged with the help of Exchange Inflow, an on-chain statistic.
If this indication is high, then investors are pouring money into these sites. Since selling is a primary motivation for holders to go to exchanges, this tendency might lead to a decline in the value of Bitcoin.
The low measure, on the other hand, suggests that holders aren't transferring a lot of coins from their own storage to exchanges, which, if outflows are also happening, may be good news for the cryptocurrency.
Moreno has provided a graphic showing the recent trend in Bitcoin exchange inflow, and here it is:
The graph up above shows that there were several significant surges in the Bitcoin Exchange Inflow just before the most recent price drop. Investors probably intended to sell after making these deposits since the indicator version seen on the chart is designed for spot platforms.
You can see the breakdown of the Exchange Inflow by transaction size using this indicator. For addresses with 1,000 to 10,000 tokens, Moreno has drawn special attention to the 1,000 to 10,000 BTC value range on the graph.
Massive investors like these, often referred to as "whales," are powerful players in the financial markets. The figure clearly reveals that there was a rise in the Exchange Inflow for these big Bitcoin holders, which likely indicates that the whales were involved in some of the deposits.
