Bitcoin Risks Deeper Price Pullback as Exchange Inflows Spike

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.

CoinDesk - Unknown — Bitcoin inflows to exchanges

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.

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

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Omkar Godbole

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