Some worrying signs are starting to appear for bitcoin’s price, at least in a short-term time frame. That’s according to a well-known analyst.
- The price for BTC has been wobbly recently, with it being unable to decisively break out in any direction.
- Last week, we saw bitcoin dipping as low as $31K only to recover and touch $38,500 days later.
- Now, however, the primary cryptocurrency is trading at around $35,500 for a 4% loss on the day.
- Commenting on the most recent price action was Ki Young Ju, the CEO at crypto analytics company CryptoQuant.
One thing that makes me worried about BTC is exchange netflows. There are many bitcoins are flowing into exchanges lately but the trading volume is still relatively low. BTC needs more trading volume to digest increasing exchange inflows.
- To clarify, exchange inflows and outflows are important to monitor because they reveal the short-term potential of selling.
- If there are many bitcoins sitting on exchanges, this means that there are many bitcoins that can be sold relatively quickly – larger investors don’t keep their bitcoins on exchanges unless they want to be able to dispose of them quickly.
- On the other hand, if there are bigger outflows, this means that people are moving their BTC out of the exchange to hot or cold storage, potentially indicating a less significant intent to sell.