Bitcoin Risks Deeper Price Pullback as Exchange Inflows Spike
Wednesday saw a flurry of deposits onto exchanges, indicating some investors are trying to offload their bitcoin. That could further propel prices downwards.
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.
- 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.
- "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.
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