Bitcoin rally halted as short-holder exchange flows pick up

On-chain data shows bitcoin exchange flows from short-term holders have accelerated recently as the asset’s rally stalls.

Bitcoin short-term holders are showing high exchange inflows

According to data from on-chain analytics firm glassnodeShort term holders have recently invested equal to 1.28% of its entire supply. “Exchange inflow” here refers to an indicator that measures the total amount of bitcoin that investors are currently depositing into centralized exchanges.

Typically, investors deposit on these platforms for selling-related purposes, so whenever this metric has a high value, it is a possible sign that dumping is occurring in the market. Naturally, such a trend could have bearish consequences on the price of the cryptocurrency.

Exchange flows are usually defined for the entire market, but in the context of the present discussion, the focus is only on the flows being carried out by “short term holders” (STH).

STH are one of two major groups in the bitcoin market (the other being “long-term holders”), and they include all investors who have held their coins for less than 155 days.

As their name already suggests, these investors do not stick around for very long, as they are usually the most volatile group in the market, easily selling off at the sight of any FUD or profit-taking opportunities. Let’s give

Now, below is a chart that shows the trend in bitcoin exchange flows over the past year or so specifically for STH.

The value of the metric seems to have been quite high in recent days | Source: Glassnode on Twitter

Here, the exchange flow of STH is represented as a percentage of their supply (that is, the sum of the wallet amounts that each individual STH currently holds). From the graph, it is visible that the value of the indicator increased to notable values ​​at the beginning of the month when the market was going through FUD such as SEC lawsuits against cryptocurrency exchanges Binance and Coinbase.

While STH were clearly showing panic, the scale of their sell-off was still much lower than other sell-offs during the past year.

After the latest rally in the price of the cryptocurrency above the $30,000 level, the indicator has seen a sharp increase in its value. Now, the metric has reached a value of 1.28%, which means that STH has recently flown the equivalent of 1.28% of its supply.

This level is higher than the level seen during the rebound rally in March this year. As can be seen from the graph, the rally was braked when STH extended its selloff.

Since the recent price jump, bitcoin has been trending sideways. So it is possible that behind this trend is the current intense selloff from STH, as happened in March.

btc price

At the time of writing, bitcoin is trading around $30,100, up 4% over the past week.

BTC continues to hold above the $30,000 mark | Source: BTCUSD on TradingView

Featured image by Maxim Hopman on Unsplash.com Charts from TradingView.com Glassnode.com