On-chain data shows that Bitcoin inflows to Coinbase have recently increased, a sign that could prove bearish for the crypto.
Bitcoin Exchange Inflow to Coinbase Records High Values
As noted by an analyst in a CryptoQuant after, a total of 20,000 BTC was recently transferred to Coinbase. The “change inflowis an indicator that measures the total amount of Bitcoin currently being transferred to an exchange (Coinbase in this case).
When the value of this metric is high, investors now send a lot of coins to the exchange. Since one of the main reasons holders deposit on exchanges is sales-related purposes, this trend could have bearish implications for the price of the cryptocurrency.
On the other hand, low values suggest that investors are not making many deposits in the exchange. Such a trend can be both bullish and neutral for BTC, depending on whether the market-wide inflows also fall or not.
Now, here is a chart showing the trend in Bitcoin inflows to the crypto exchange Coinbase the past few months:
Looks like the value of the metric has been high on several occasions in recent days | Source: CryptoQuant
As can be seen in the chart above, Bitcoin exchange inflows to Coinbase have registered many large spikes over the past few weeks. However, as is clear, there were no significant price movements following any of these large deposits.
These spikes individually were not that big. So if the investors who made these transfers were to dump their coins as soon as they completed the transactions, it would make sense that they would not inconstancy.
However, the quant notes that there could be a different scenario here. What if the holders responsible for this influx have not yet taken the plunge? It is not uncommon for investors to deposit their coins in exchanges in advance, waiting for the right movements in the price to leave.
All of these transfers amounted to approximately 20,000 BTC that ended up in Coinbase’s wallet. At the current exchange rate, this stack would be worth around $336 million, which is certainly large enough to cause volatility in the price of the crypto if sold all at once.
“Of course, if it were sold immediately after the deposit, the situation would be different, but you have to be careful if it has not been sold yet,” warns the analyst.
BTC price
At the time of writing, Bitcoin is trading around $16,800, up 1% over the past week.
BTC seems to have seen a small increase in the last few days | Source: BTCUSD on TradingView
Featured image of Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com