Bitcoin (BTC) has been experiencing a bumpy ride lately. As of March 8, BTC was trading at $21,989, marking a drop of roughly 12% from its 90-day high of $25,134.
The recent bearish price action has left investors and traders scratching their heads, wondering what’s behind the downturn. Some traders are saying big declines could be coming.
So, let’s take a closer look at the on-chain metrics to uncover what’s really driving the current state of the market.
Bitcoin exchange netflow
According to the Exchange Flow Balance metric, bitcoin whales are taking a cautious approach to the market.
This important indicator tracks the net amount of bitcoin deposited or withdrawn from exchanges. Recent activity suggests that whales are moving their holdings off exchanges.
On Mar. 7, a staggering 5,136 BTC were withdrawn from exchanges, following 6,760 BTC, on Mar. 8, worth approximately $261.86 million at current prices.
This could significantly impact the BTC price in the coming days, as historically, large withdrawals indicate that investors are anticipating a market downturn and taking proactive measures to safeguard their investments.
Stablecoins exchange netflow
There appears to be a significant influx of stablecoins into centralized exchanges, totaling almost billions of dollars.
As investors typically use stablecoins to escape the volatility associated with cryptocurrencies like Bitcoin, the recent drop in Bitcoin’s price may have prompted investors to convert their BTC back into stablecoins to avoid further volatility.
If this is the case, then it is likely that the selling pressure created by the influx of stablecoins into centralized exchanges will have a bearish effect on Bitcoin’s price and other cryptocurrencies that investors may be swapping into.
However, it is important to note that other factors could impact the price of cryptocurrencies, and it is always difficult to predict market movements with certainty.
Stay tuned for further updates on the market’s trajectory, but buckle up; it looks like it’s going to be a bumpy ride.