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.
The leader in news and information on cryptocurrency, digital assets and the future of money, 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. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.