Bitcoin exchange inflows surge, increasing the likelihood of a selloff

Bitcoin began to see increased inflows to centralized exchanges starting December 1, signaling a potential selloff.

Net flows on the Bitcoin (BTC) exchange increased from a net outflow of $69 million to a net inflow of $326 million, according to data provided by IntoTheBlock. The flagship cryptocurrency recorded net inflows of $230 million on December 3.

BTC exchange net flow | Source: IntoTheBlock

According to ITB data, more than $562 million in total Bitcoin entered CEX platforms.

Additionally, the asset’s large holder/exchange net flow ratio rose to 0.86% on Tuesday, according to ITB data. The indicator shows that Bitcoin whales are more active than retail holders.

Data from the analytics platform shows that large Bitcoin transactions worth at least $100,000 also increased from 17,960 to 25,830 in the same time period as exchange net flows.

Major trading volume in BTC increased from $38.7 billion to $87.3 billion on Monday, December 2. According to ITB, Bitcoin recorded a total of $169.6 billion in whale transactions in the last seven days.

On-chain data shows that an 11-year-old whale address with 2,700 BTC worth over $257 million transferred its Bitcoin holding to another wallet for the first time since December 2013, signaling a potential sell-off due to a 157x return.

The whale accumulated Bitcoins while the price was hovering around $625, totaling $1.68 million.

Bitcoin is trading at $96,500 after gaining 1% in the last 24 hours. Its market cap has once again surpassed the $1.9 trillion market.

Increased foreign exchange inflows can trigger FUD (fear, uncertainty and doubt) among retail investors. However, a sudden increase in whale accumulation could change market sentiment and increase buying pressure.

At this point, the next big bullish catalyst for Bitcoin and altcoins will be a potential interest rate cut by the US Federal Reserve. The FOMC meeting will be held on December 17 and 18.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.