Bitcoin price dump ‘not going to happen’ as whales stay off exchanges
A Bitcoin (BTC) sell-off and associated price fall are “not going to happen,” a well-known the CEO of a well-known analytics tool has said.
In a tweet on Oct. 12, Ki Young Ju, CEO of CryptoQuant, noted that average inflows to exchanges were staying low despite BTC price gains.
Ki: Exchange inflows “still in the safe zone”
Ki highlighted CryptoQuant’s mean exchange inflow metric, which remains comfortably within the low-risk area, suggesting a low chance of a sell-off.
Mean exchange inflow measures how much Bitcoin is entering exchanges, with the implication that it could be used for selling or trading activities. By extension, it gives an idea of whale activity — large volume hodlers planning to divest themselves of BTC.
“$BTC dumping is not going to happen,” Ki commented.
“All Exchanges Inflow Mean usually indicates how many whales are active on exchanges. Above 2 BTC is the danger zone, and we’re still in the safe zone.”
As such, BTC/USD climbing to near $11,500 this week has not increased investors’ temptation to sell.
Bitcoin mean inflows vs. BTC/USD 1-month chart. Source: Ki Young Ju/ Twitter
The lack of activity runs in stark contrast to earlier this year. On March 9, a week before coronavirus caused a cross-asset price crash, exchange inflows passed the 2 BTC “danger zone.” Days later, around March 14, inflows hit a peak of almost 5 BTC. Bitcoin subsequently fell to $3,600.
What BitMEX selling pressure?
CryptoQuant has also previously highlighted flows from miners contributing to Bitcoin price action. Last month, it was a spike in flows from mining pools, also presumably destined for sale, which accompanied a 3% decline in BTC/USD.
In October, the situation with withdrawals was distorted by BitMEX as the derivatives giant is currently under investigation by U.S. tax authorities. Outflows from BitMEX totaled 50,000 BTC on Oct. 2 alone, CryptoQuant data shows.
BitMEX inflows and outflows chart. Source: CryptoQuant
BitMEX, Cointelegraph and Digital Assets Data figures confirm, does not hold as much market share for Bitcoin futures as it did in the past.
Bitcoin futures volume exchange comparison 1-month chart. Source: Cointelegraph/ Digital Assets Data
As various analysts noted, Bitcoin has thus broadly weathered the storm caused by the platform’s problems, beating out resistance levels at $11,000.
This resilience has emboldened the Bitcoin bull case, Cointelegraph reported, with an increasing number of market participants confident in further gains preceding fresh downside.
