- Analysts note a drop in illiquid supply ratio as dormant Bitcoins move, hold a short-term bearish outlook.
- Bitcoin balance on exchanges spikes, largest single-day inflow since "Black Thursday," likely to trigger a mass sell-off.
- Decrease in holdings of whales’ Bitcoin wallet addresses observed, likely meaning whales are waiting to begin accumulating.
Historically, an increase in Bitcoin inflows to exchanges – an activity being observed now – comes before a price dip. Analysts fear further consolidation in the asset before it resumes an uptrend.
Bitcoin sell-off may have commenced with largest inflow since "Black Thursday"
On August 23, analysts observed the most significant spike in Bitcoin exchange inflow since May 2020. The event dubbed "Black Thursday" was a sudden collapse in BTC price as it nearly halved within a single day. A sudden drop in prices triggered several forced liquidations adding to the selling pressure on exchanges.
Over the past 36 hours, inflow of Bitcoin to exchanges and net flow of Bitcoin on exchanges, both metrics indicate that the BTC wallet balance on exchanges is up. These indicators are considered a precursor of a sell-off event.
Historically, large Bitcoin inflows to exchanges signal that large wallet addresses are gearing up to offload part of their BTC holdings and take profits.
Dino Ibisbegovic, an analyst at Santiment, a behavior analytics platform, recently shared an update on the massive exchange inflow of BTC in a YouTube video. Ibisbegovic states:
On-chain analysts believe that spikes in exchange inflow and exchange flow balance point to a period in time where addresses are looking to claim some of their profits, reduce their exposure, and this is obviously happening right as Bitcoin broke $50,000.
Lark Davis, an independent Bitcoin analyst and YouTube content creator, shares Ibisbegovic's bearish outlook on Bitcoin. Davis tweeted:
#bitcoin inflows to exchanges on the rise, this often comes before a price dip. So far the market is absorbing the sell pressure with price only down a few percent. pic.twitter.com/EDjnJopEmB
— Lark Davis (@TheCryptoLark) August 25, 2021