Bitcoin may face a rough time experiencing a V-shaped recovery to recently conquered heights in the short term. This is indicated by on-chain activity showing growing selling mood on the market.
Blockchain data analysis firm CryptoQuant’s exchange inflow indicator – a metric that measures the 144-block (around 24-hour) average of Bitcoin deposits on the leading cryptocurrency exchanges – has increased to 2.5 Bitcoin, marking the highest score since March.
In short, the average size of inward-flowing transactions to trading platforms has climbed to eight-month highs. “The data suggests whales are transferring their Bitcoins to crypto exchanges,” CryptoQuant CEO Ki-Young Ju said.
Bitcoin is trading for $16,981 at the time of writing this article, scoring a 2% drop on a 24-hour basis. The first cryptocurrency faced pressure above $17,350 on Friday.
The eventuality of prices dropping to or below Thursday’s low of $16,326 cannot be ruled out considering the average inflow-indicator now moving above 2 Bitcoins – into the so-called “danger zone.”
A score above 2.00 on the indicator has consistently led to notable price dips this year. The key indicator rose above that mark a week before the steep 40% drop seen in early March.
In the same way, the price crash experienced in November 2018 was preceded by a considerable rise in the metric. Meanwhile, technical chart studies suggest low odds of a fast bounce to heights above $19,000.
