Bitcoin (BTC) has made a significant return to exchanges on July 27, indicating that the cryptocurrency may experience “major volatility” in the near future. Data from on-chain analytics firm Glassnode shows that intraday Bitcoin exchange inflows have reached multi-month highs. Traders have been warning of further downside potential for BTC, as its price continues to hover below $30,000. The largest-volume investor cohort in Bitcoin, known as the whales, appears to be uncertain in the current market.
The recent movement of large amounts of BTC coins has caught the attention of market observers. They are now focused on entities sending funds to exchanges, as this could potentially increase selling pressure. James Straten, a research and data analyst at crypto insights firm CryptoSlate, pointed out that over 10,000 BTC in inflows on a single day is the largest one-day increase in several months. He compared it to the collapse of Silicon Valley Bank (SVB) in March, which led to market uncertainty.
Traders, including popular trader Ali, have also warned of a potential spike in volatility. They noted that a large number of idle BTC has been exchanged in the past 24 hours, coinciding with a 10,000 BTC increase in supply on crypto exchanges. This signals a potential increase in selling pressure.
Glassnode’s data shows that the combined BTC balance on the exchanges it monitors has crossed the 2.25-million mark. However, overall balances remain at multi-year lows, having last reached 2.25 million in March 2018. This indicates that despite the recent inflows, the overall supply of BTC on exchanges is still relatively low.
Straten also emphasized the importance of the cost basis of Bitcoin hodler cohorts in determining BTC price. Both short-term and long-term holders’ cost basis levels have been closely monitored. Long-term holders have reduced their cost basis to $20,490, the lowest level since April 2022. The realized price is now only $70 below the cost basis. Analysis of past bear markets shows that short-term holder realized price has served as support for Bitcoin’s price, and this pattern is repeating in 2023.
It is important to note that this article does not offer investment advice. Every investment and trading move carries risks, and readers should conduct their own research before making any decisions.