With Bitcoin withdrawing toward $23k, blockchain analytics firm CryptoQuant has noted two data points to keep in mind while monitoring the asset’s future short-term price action.
Analysts for the company found that some large players appear to be topping up the market with sell pressure – including Bitcoin miners.
According to CryptoQuant analyst abramchart, whale activity is rising on Bitcoin spot exchanges.
The Bitcoin Exchange Whale Ratio – a metric comparing the top 10 Bitcoin transactions flowing into exchanges to the total number of exchange inflows – rose to 0.78 as of March 1st, compared to roughly 0.5 last month.
“The BTC Whale Rato metric is high for the next day in SPOT exchanges and this rise is often due to large inflows,” explained the analyst. “This behavior can lead to selling pressure.”
The analyst added that the number of Bitcoin flowing into spot exchanges as of Monday was approximately 12,310 BTC – worth over $286 million at current prices. On Wednesday, inflows were about 10,588 BTC.
Among 6 respondents to the data, 4 interpreted the analyst’s comments as “bearish.”
In general, crypto flowing into exchanges is considered a sign that investors are seeking to liquidate their crypto, generating downward price pressure. By contrast, exchange withdrawals are often interpreted as bullish, signaling that investors intend to HODL their coins for the short to medium term.
That’s what many of the largest Bitcoin miners did during the 2021 bull market, intending to benefit from Bitcoin’s rising price rather than liquidate their holdings. However, industry giants like Core Scientific and Argo Blockchain were forced to dump vast portions of their holdings last June as prices receded, contributing to selling pressure across the market.
As analyst JAYBOT explained on Tuesday, miners began sending their Bitcoin back to exchanges in especially high volumes on Tuesday, in possible preparation for further sales.
“Therefore, it can be seen that short-term selling pressure has increased,” he said, while clarifying that he still sees no effect on “long-term price action.”