Crypto Exchanges See Fastest Bitcoin Inflows Since ‘Black Thursday’ in March 2020

Blockchain inflows to cryptocurrency exchanges rose the most on Monday within 15 months, blockchain data shows. This could be a sign that more retailers are trying to liquidate their stocks in a falling market.

According to data provider Glassnode, the crypto exchanges recorded a net inflow of 30,749.89 BTC on Monday. This was the largest one-day tally since March 12, 2020, when Bitcoin price fell 40% due to coronavirus-triggered panic selling in global financial markets and dated the nickname “Black Thursday”.

Investors typically transfer bitcoins to exchanges when looking to liquidate their holdings. On Black Thursday, for example, the exchanges recorded a net inflow of over 40,000 BTC.

Connected: Bitcoin drops below 40K

Bitcoin fell to $ 42,102 on Monday, extending the previous week’s decline by 20% and hit its lowest level since February 8, according to CoinDesk 20 data. The sell-off picked up over the weekend, with some Twitter users suggesting that US electric car maker Tesla could sell its Bitcoin holdings.

Elon Musk, Tesla CEO, made it clear early Monday that the company has not been selling any coins. So far, however, Musk has failed to raise the cryptocurrency above $ 45,000.

While net inflows rose on Monday, most of the action was mostly focused on Binance, a preferred location for retail investors, according to Glassnode. Meanwhile, the US exchange Coinbase continued to see bitcoin outflows, possibly indicating continued demand from institutional investors looking to buy the drop in prices.

“Coinbase has seen almost entirely net outflows of BTC since breaking its all-time high of $ 20,000 in recent cycles, a trend that has continued this week,” Glassnode said in the weekly newsletter published Monday. “Coinbase is the preferred place for institutional accumulation in the US. Given the size of typical daily withdrawals (10,000-20,000 per day), this suggests that larger buyers will continue to actively accumulate during this correction.”

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Connected: Market Wrap: Ether climbs and pushes past ‘Musk Dip’ with increasing crypto volatility

While Binance received more than 80% (or 26,000 BTC) of the total net inflow of 30,749.89 BTC on Monday, US-based Coinbase recorded a net outflow of 146 BTC.

The two exchanges have seen different trends in net flows over the past few weeks. The balance held on Coinbase has dropped 34,408 BTC since April 19. Meanwhile, the amount held on Binance has increased by 95,397 in the four weeks.

The magnitude of net Bitcoin flows on Binance has increased sharply in recent months, which is a sign of the “volatility in the macro sentiment of Binance users” noted by Glassnode.

Also read: The Bitcoin chart indicator suggests that the worst pullback may be over

“This is yet another indication that recent inflows are likely to be driven by both new entrants (panic sellers) and possibly the rotation of capital into other crypto assets,” says Glassnode’s weekly newsletter. For example, some investors might transfer Bitcoin to Binance to find alternative cryptocurrencies.

Inflows, however, don’t mean instant liquidation, just traders positioning themselves for a quick sale, and it’s hard to gauge how many of the coins have already been liquidated, partly due to limitations in the data.

There is also the possibility that some of these traders may be aiming for higher Bitcoin prices.

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