30 June 2024
Recent on-chain data shows that substantial amounts of Bitcoin have made their way to centralized exchanges in the last few days. How could this impact the Bitcoin price?
Bitcoin Price To Face Further Selling Pressure?
In a new post on the X platform, prominent crypto analyst Ali Martinez revealed that Bitcoin investors have been transferring their assets to centralized exchanges in recent days. The relevant indicator here is CryptoQuant’s Exchange Reserve metric, which tracks the total amount of a particular cryptocurrency held on all exchanges.
It is worth noting that the value of this metric rises when investors are making more deposits than withdrawals of a cryptocurrency (Bitcoin, in this scenario) into centralized exchanges. Meanwhile, when the metric’s value falls, it means that holders are transferring their assets out of the trading platforms.
According to CryotoQuant data, more than 14,000 BTC (valued at approximately $851.2 million) have been sent to crypto exchanges in the last four days. As shown in the chart below, the exchange reserve metric is at its highest level in nearly a month.
Typically, an increase in the exchange reserve indicates high selling pressure, as investors often use centralized exchanges to sell assets. Consequently, the movement of huge amounts to trading platforms could exacerbate the downward pressure on the Bitcoin price.
Furthermore, the exodus of significant amounts to centralized exchanges could trigger price volatility for the premier cryptocurrency. This would imply an increased likelihood of big price movements in the future.
However, there has not been any impact on the Bitcoin price in the past day. As of this writing, the price of the premier cryptocurrency stands at around $60,700, reflecting a bare 0.3% increase in the last 24 hours.
Price Rebound Imminent For BTC: Santiment
Fortunately, it is not all gloom for the Bitcoin price at the moment. Prominent on-chain analytics platform Santiment has offered a positive outlook for the price of the market leader.
According to the blockchain firm, Bitcoin’s recovery following dips in the past two weeks has been short-lived. Santiment believes that a price rebound is imminent for the premier cryptocurrency.
The rationale behind this analysis is based on two factors; the recent negative sentiment from the crowd and the low relative strength index (RSI). Santiment said in its post:
But note the continued negative sentiment pouring in from the crowd, indicating their patience is wearing thin. This, along with a low RSI of just 36, are strong indications a bounce is close.