Bitcoin (BTC) may soon extend Wednesday’s price pullback, according to a data metric that suggests there’s increased selling pressure in the market.

  • While the top cryptocurrency by market value fell by 4% on Wednesday, it defended the long-held support zone of $11,100–$11,200.
  • Exchange platforms witnessed an inflow of 92,000 BTC on Wednesday, the biggest-single day rise in 37 days, according to blockchain intelligence firm Chainalysis.
  • "Inflows surged as people rushed to sell at near $12,000," Philip Gradwell, chief economist at Chainalysis, tweeted early Thursday.
btc-inflows-to-exchanges
Bitcoin inflows to exchanges
Source: Chainalysis
  • Gradwell believes the selling pressure (arising from the exchange buildup of 92,000 BTC) has probably not been fully absorbed yet.
  • That's because bitcoin's median trade intensity, which measures the number of times an inflowing coin is traded, remained low at 3.113, well below the 180-day average.
  • Put simply, there were not enough buyers to match sellers.
  • As such, coins that weren't liquidated yesterday could still be offloaded into the market in the short run, causing a more profound price decline.
btc-trade-intensity
Bitcoin trade intensity
Source: Chainalysis
  • "I think there is still sell pressure to work through," Gradwell said.
  • Bitcoin is currently trading near $11,300, representing a 0.7% decline on the day.
  • As discussed Wednesday, a violation at immediate support at $11,170 would confirm a bearish reversal pattern on the technical charts.

Also read: Open Positions in Deribit’s Ether Options Hit Record High Above $500M

Disclosure
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.