Major Bitcoin addresses send funds to derivatives exchanges, according to data provided by on-chain analytics firm CryptoQuant. The company’s CEO, Ki Young Ju, assumed that the reason might be margin filling or opening new positions.
What does Bitcoin (BTC) transferred to exchange wallets mean?
According to experts, the rapid increase in Bitcoin (BTC) currency inflows from major exchange wallets can become an alarming signal for crypto investors, as in most cases it becomes a sell signal when funds move from a spot market to a derivatives exchange. Bitcoin traders usually keep their coins on exchanges as they look forward to selling them.
CryptoQuant CEO suggested another version:
CryptoQuant CEO Ki Young Ju suggested another version for the analysis: Once Bitcoin drops sharply to $46,000, some holders may start opening new long positions or fund their previous positions approaching liquidation. He also added that for the most part, whenever these wallets move funds to exchanges, they accumulate large amounts of Bitcoin, which leads to padollar price increases.
Earlier, there was an increased derivatives entry in October just before the start of the last major bull run, when Bitcoin rallied from $10,000 to $60,000. Cryptocoin. com, the reason for this strong price increase was high leveraged positions. To generate a significant increase in volatility in the market, most positions need to be financed by derivatives exchanges that provide high profits for their traders. The market will likely not see the impact right away, as the volumes carried are too large to be implemented immediately.
At the time of writing, Bitcoin was advancing to $46,000 after falling sharply from $52,500 to $43,000 in one day.