Bitcoin has enjoyed some uptrend over the past day as the crypto once again visits the $44k price level. On-chain data suggests that an uptick in exchange outflows may be behind the move.
Bitcoin Exchange Outflows Observe A Spike In The Past Couple Of Days
As pointed out by an analyst in a CryptoQuant post, the BTC exchange outflows have showed raised values recently.
The “all exchanges outflow” is an indicator that measures the total amount of Bitcoin exiting wallets of all exchanges.
When the value of the metric goes up, it means more BTC is currently exiting exchanges. Such a trend has usually been bullish as holders usually withdraw their coins to personal wallets for hodling purposes. Prolonged large outflows can be a sign of whale accumulation.
On the other hand, when the indicator’s value stays low, it implies not many investors are moving their Bitcoin off exchanges at the moment.
This trend can be bearish if the opposite metric, the inflow, spikes up. This is because holders usually deposit to exchanges for withdrawing to fiat or for purchasing altcoins.
Related Reading | Bitcoin Death Cross 2022: What You Need To Know About The Deadly Signal
Now, here is a chart that shows the trend in the Bitcoin all exchanges outflow indicator over the past year:
The indicator's value seems to have spiked up | Source: CryptoQuant
As you can see in the above graph, the value of the Bitcoin outflow has shown an uptick recently. This means that a large amount of withdrawals has taken place over the past couple of days.
Related Reading | SOPR Shows Bitcoin Holders Continue To Sell At A Loss, Similar To May-June 2021
According to the quant, this trend might show that the $40k price level is important to some investors. Whenever the crypto approaches a support level, outflow spikes like these usually occur as holders are keen to buy more as Bitcoin’s value dips to such levels.
At the time of writing, Bitcoin’s price floats around $43.8k, up 2% in the last seven days. Over the past month, the crypto has lost 12% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to have finally shown some upwards momentum | Source: BTCUSD on TradingView
After weeks of trending downtrend, Bitcoin finally seems to have shown some solid movement up as the crypto broke past the $44k mark several times in the past day.
The move may have been fueled by the recent uptick in the exchange outflows. It’s unclear at the moment if this is the rally that will help the crypto escape from the $40k to $45k range. Nonetheless, it’s some upwards momentum for the coin at last.
Featured image from Unspash.com, charts from TradingView.com, CryptoQuant.com
Discussion about this post