Bitcoin Exchange Netflows Are Negative, Could A Bull Run Be Coming?

Bitcoin shows negative exchange netflows on CryptoQuant charts recently, an indicator that a bull run might be coming soon.

Negative Exchange Netflows

Bitcoin exchange netflow is an indicator that highlights whether more BTC is moving into exchanges than out.

A more technical definition of the term is that it’s the difference of the exchange inflows and outflows.

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Exchange Netflow = Inflow – Outflow

The exchange inflow is just the amount of BTC transferred to exchanges, while outflow is the opposite.

Here is a chart that shows the current trend in Bitcoin exchange netflow with the BTC price:

Bitcoin netflow

Bitcoin netflow

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BTC netflow shows negative behavior recently | Source: CryptoQuant

As is clear from the above chart, the recent trend of the Bitcoin exchange netflow has been negative. This means that more people are withdrawing their BTC from exchanges compared to those who are sending the coin to exchanges.

On closer inspection of the chart, another thing becomes apparent. Negative netflow seems to precede an increase in the price of the cryptocurrency.

Before the 2021 bull run, the netflow was deeply negative for a prolonged period of time. It was followed by alternating negative and positive neftlows that resulted in the different peaks to form.

Related Reading | Bitcoin Daily Trading Volume Nosedives To Lowest Of 2021

While the recent crash was accompanied by a deeply positive netflow. And it makes sense, as a negative neflow means people are selling off their Bitcoin investments in exchanges.

Now, following the pattern of the chart, the current negative netflow might also result in an increase in the price of BTC.

However, the netflow isn’t as negative as at the start of the year so if the price is going to rise, it won’t be as drastic as that bull run.

Bitcoin Price

BTC’s price is around $34k right now. It’s value is down 0.52% in the past 7 days. Here is a chart showing the trend over the past 6 months:

Bitcoin Price

Bitcoin Price

Bitcoin shows an almost flat line | Source: BTCUSD on TradingView

BTC has shown stagnation in the past couple of days as its value is stuck near the $34k mark. Market volatility is the lowest since the bull run as per some indicators.

It’s unclear when Bitcoin will be able to break out of this freeze zone, and which direction it will go in.

However, as mentioned before, a negative netflow might mean the price is going to rise soon. If a bull run is coming as it indicates, BTC might be leaving up from this flatline.

Related Reading | China Banned Bitcoin Mining. What Happens To Small Hydropower Stations Now?

A notable thing is that while a bull run might be soon, it’s possible the rise could be only short-term. The earlier chart shows that not too long before the crash, the netflow was negative.


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US Bitcoin exchange traffic explodes as analyst says flows hint at new BTC bull run

Bitcoin (BTC) exchanges in the United States are seeing unprecedented popularity as a wave of adoption sweeps the market. 

Data from statistics resources Alexa and Similarweb shows that major exchange Coinbase now ranks within the top 1,000 most popular websites around the world.

Coinbase in top 400 U.S. sites

As BTC/USD circles all-time highs, its run to $42,000 in January appears to have sparked a tsunami of new user engagement with some of the most popular cryptocurrency trading platforms.

In the U.S., the focal point of institutional inflows into Bitcoin in recent months, exchanges Gemini, Kraken and Binance U.S. are all part of the top 10,000 global sites. 

While Binance just beats Coinbase in terms of worldwide visits, the latter reigns supreme among its domestic market, ranking 386th among U.S. internet users. The data relates to December 2020, with the crypto rush at the start of this year likely hiking exchange popularity even further.

Despite widely publicized system outages and other technical problems — phenomena which have plagued Coinbase throughout the years — its popularity remains clearly unaltered. 

“Coinbase had 1.3M app downloads in January. That’s more than E-trade, TD Ameritrade, Charles Schwab, Fidelity, and Sofi had….combined,” Morgan Creek Digital co-founder Anthony Pompliano noted on Tuesday.

Coinbase currently ranks as the top crypto-specific finance app on the Apple App Store, with both Binance and Binance U.S. also in the top ten.

Top 10 most-downloaded finance apps in Apple App Store. Source: Similarweb

In a further hint that bad publicity is not as bad as it may seem, retail trading app Robinhood likewise saw a huge jump in app downloads last week as users and commentators alike complained about what they viewed as arbitrary restrictions on their actions. 

Withdrawals herald return to Bitcoin upside

As Cointelegraph reported meanwhile, Coinbase as a venue for large buys has become a useful bellwether for assessing market appetite to buy or sell. 

This week saw large withdrawals from the exchange to private wallets, something which one analyst suggested marks a continuation of institutions buying for the long haul.

Coinbase Pro outflows vs. BTC/USD. Source: Ki Young Ju/ CryptoQuant

“The strongest bullish signal is working,” Ki Young Ju, CEO of on-chain analytics resource CryptoQuant, continued in fresh comments on Wednesday.

“32.4k was the bottom and $BTC price surged +13%. But as I said, institutional buying is the strongest bullish signal overriding all other bearish signals. I expect it will go up more.”

BTC/USD is trading at around $36,000 at the time of writing, up 4.8% on the day after hitting highs of $36,820.