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As , we would like to dwell on a “saadollarsi bomb” that traders regarding Bitcoin should know, noted by analyst Varuni Trivedi. Despite Bitcoin fluctuating around $40,000 in the last 48 hours, the outflow of BTC from exchanges continued its downward trend. During the week, the “exchange balance sheet” is 13% of the circulating supply. It continued to drop to reach a new low of 0.

Watch out for bitcoin

While the aforementioned exit trend continues to surprise, it was also interesting to see how Bitcoin exits occur differently for different exchanges and what influences this behavioral difference. This article will explore how different sentiments and external and geographic factors play out during exits from some of the top exchanges. According to a recent Glassnode report, there seems to be more demand for cryptocurrencies accumulating from the “exchange balance sheet”. In fact, the previous week saw a highly negative (outflows) exchange netflow reading, with BTC outflows occurring at a rate of –92k BTC/month. In particular, both the exchange balance and the exchange net flow balance highlighted that the market has clearly changed its paradigm after March 2020.

Comparative performance of exchanges

While exits have remained stable in the market, external factors seem to have affected how the exchanges in the spectrum behave. A characteristic behavior was noted in the two exchange groups. The first batch of exchanges included Bittrex, Bitfinex, Kraken, Gemini, and Binance. Rather, the latter included Bitstamp, OKEx, Huobi, and Coinbase. The first batch of exchanges showed characteristic inflows and balance growth for most of 2020 and 2021, reflecting the growing dominance of crypto assets. Binance and Gemini were the primary buyers of this group. After the May sales, the balances in this group of exchanges plateaued and saw modest crypto outflows.

On the other hand, the second group of exchanges has seen continuous exits since March 2020. In fact, this has accelerated in recent weeks. Moreover, the net balance between exchanges continued to decline as the entries observed in May were absorbed by the market and moved into investor wallets.

Exchange balance serves as an important metric for measuring traders’ sentiment towards the underlying asset. In the case of Coinbase, it’s a hint of traders’ intent to hold BTC rather than sell it. In particular, the amount of Bitcoin held in Coinbase Pro’s vaults dropped by 28,843,87 BTC last month.

On the other hand, according to analyst Varuni Trivedi, the modest exits from Binance were indicative of holders’ skepticism towards the price of BTC. According to analyst Varuni Trivedi, it could also play a role in this trend as Binance caters to a more global kidollarse. Rising Bitcoin balances on Binance suggested that its users are considering selling BTC, which is the opposite of the trend seen on Coinbase.

Looking back, it can be seen that the Bitcoin balance on Binance increased from 199,700 BTC on April 20 to 347,590 BTC on June 26 – more than 1.5 times. During that time, the price of Bitcoin has dropped from $65k to just under $3k. Therefore, according to analyst Varuni Trivedi, the increase in balances could be a saadollarsi bomb unless the price rebounds soon and exits do not dominate Binance again.

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Michael Lewis


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