After shooting all the way $52,000 last week, the world’s largest cryptocurrency Bitcoin (BTC) has resumed the downward trajectory once again. Since last week’s high, the Bitcoin price is down by more than 10%.
At press time, BTC is trading 1.8% down slipping under $47,000. As per on-chain data provider Santiment, the Bitcoin sell pressure builds amid record exchange inflows. The data provider notes:
Bitcoin (BTC) just made history with its largest day of exchange inflow since June 19, 2019. These days are now tied for the largest inflow day of all-time, both with 1.68M $BTC flowing to exchanges on these respective days. Expect increased volatility.
CryptoQuant CEO Ki-Young Ju predicted three possible case scenarios amid the growing Bitcoin exchange inflows.
- Increase selling pressure.
- Increase volatility as $BTC is used as collateral for derivatives.
- Alt season with BTC pairs.
Lawmakers and Institutions Warming Up to Bitcoin
Several lawmakers and institutions have started betting big on Bitcoin (BTC) and are seeking exposure through available regulated instruments in the market.
While the exchange inflows have spiked to a two-year high, Bitcoin whales have continued adding more BTC in their kitty. However, it would be prudent to cautiously trade Bitcoin at the current levels since it has formed a bearish divergence of lower lows on the charts.
Bitcoin’s currently 200 DMA is placed at $46,000. It is crucial for BTC to sustain these levels if it has to continue further with northward momentum. As per data on CryptoQuant, nearly 2400 BTC longs were liquidated on Thursday.
Earlier this week, on-chain data provider Glassnode explained: “The proportion of old $BTC spent on-chain increased last week, as some investors de-risk and take profits. So far the market has absorbed these realised profits, despite an overall net inflow of coins to exchanges”.
Over the last month and so, the BTC price has surged 40% from its lows of under $30,000. However, BTC still trades at over 30% discount from its all-time high of $64,000 in April 2021.