Bitcoin exchange inflows and outflows continue to be a way to determine what investors are doing with their coins. These usually follow a trend either in a bull or a bear market and deviate when there is a change in the market. This time around, with the market back in another surge, looking at the exchange net flows paints a rather positive picture. This is because bitcoin outflows continue to dominate in this regard.
Bitcoin Outflows Ramp Up
For the past week, the price of bitcoin has been on an uptrend. This recovery which had started on Monday had raged on through the week, seeing the digital asset finally break above $47,000 for the first time in three months. Speculations have abounded in the space since then as to how long recovery like this can last. As such, investors will look to metrics like exchange inflows and outflows to determine if investors are buying or selling.
For bitcoin, the numbers have been favorable towards a continuous rally. Looking at on-chain data shows that outflows still surpass inflows by a large margin. Glassnode Alerts posted a report that showed that while inflows were at $7.9 billion for the past week, there was a total of $9.5 billion worth of bitcoin leaving centralized exchanges. This came out to a negative net flow of -$1.5 billion.
Data like this suggests that investors are selling less than they are buying. Given that such high volumes are leaving the exchanges, it is expected that investors prefer to accumulate their coins during this time rather than sell. Therefore, since more BTC is being removed from exchanges than that moved to be sold, there is less supply in the open market, causing fewer coins to be available for demand, leading to a higher value.
Tether Shows Better Metrics
Bitcoin’s net flows are not the only thing that suggests that the rally is just in its beginning stages. Now, Tether (USDT) has the largest pairing of any other cryptocurrency in the market with bitcoin. This usually provides a direct correlation with how investors are moving their Tether in and out of the exchanges to bitcoin’s price.
BTC drops to $46K | Source: BTCUSD on TradingView.com
For the last week, Tether inflows had ramped up too. A total of $4.4 billion in inflows were recorded while there was a total of $4.9 billion Tether moved to exchanges. It is presumed that such volumes being moved to the exchanges are for the purposes of purchasing cryptocurrencies like bitcoin.
Given this and the fact that bitcoin exchange outflows keep growing, there is still significant buy pressure in the market. Coupled with the accumulation trend among bitcoin investors, bitcoin may only be starting out on this rally.