One more drop could trigger a chain reaction as traders get nervous, data advice, and exchange users rush to deactivate their BTC holdings.
Bitcoin (BTC) could be on the brink of a major retail outage as exchange flows have reached a three-and-a-half-year high.
Data from the on-chain analytics platform CryptoQuant shows users of 21 major exchanges sending coins to their wallets on June 14.
With BTC / USD falling to a low of $ 20,800, panic spread among traders, and a reversal that peaked at $23,000 at one point, some people seemed willing to believe that the worst was over.
Since then, spot price action has returned to around $ 21,000, with 24-hour exchange inflows reaching 59,376 BTC.
According to CryptoQuant data, this is the largest daily flow since November 30, 2018. On that day, the exchanges recorded a net flow of 83,481 BTC.
May 9, 2022, ended with a net flow of 29,082 BTC for platforms monitored by CryptoQuant.
Thus, concerns may now be raised about whether the bitcoin market will create more sell-side pressure in the coming days and weeks. Around a month after the 2018 influx, BTC/USD hit its cycle bottom of $3,100, 84% below its prior all-time high of $20,000.
As Cointelegraph reported, analysts are of mixed opinion regarding whether Bitcoin will repeat the trend this cycle. An 84% drawdown would mean a bottom of just $11,000.
In a separate analysis of the price situation, statistician Willy Woo concluded that macro market movements would dictate Bitcoin’s bottom.
“I think it’s simpler than this, IMO we’ll find a bottom when macro market stabilizese,” part of a Twitter thread contemplating various price support theories read.
Analyzing who is selling so far, meanwhile, the CEO of CryptoCount, Key Young Xu, has been pointing the finger at derivatives traders and the largest global exchange Binance.
Ki mentioned that the largest number of coin days destroyed — obsolete coins that became active after a dormant period — came from those specific venues.
“This selling pressure came from Binance and FTX,” he tweeted on June 13.
“$BTC Exchange Inflow CDD(Coins Days Destroyed) indicates old whale deposits. Binance’s Inflow CDD reached a year-high before the drop.”
Ki added that this was in contrast to other whales, which were relatively calm throughout the rise in prices, which began with the May Terra Luna eruption.
Data from CoinGlass, an on-chain analytics resource, shows the extent of FTX’s negative bias, especially in recent days.
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