On-chain data shows Bitcoin inflows to Coinbase have spiked recently, a sign that could be bearish for the crypto.
Bitcoin Exchange Inflows To Coinbase Register High Value
As indicated by an analyst in a CryptoQuant post, a total of 20k BTC was transferred to Coinbase recently. The “exchange inflows” is an indicator that measures the total amount of Bitcoin that is currently transferred to the exchange (which, in this case, is Coinbase).
When the value of this metric is high, investors send a lot of coins to the current exchange. Since one of the main reasons people deposit to exchanges is for sales-related purposes, this trend could have bearish implications for crypto prices.
On the other hand, low values indicate that investors do not make large deposits in the exchange. The trend may be bullish or neutral for BTC, depending on whether the market inflows are also bearish or not.
Now, below is a chart showing the trend of Bitcoin inflows to crypto exchange Coinbase over the past few months:
Looks like the value of the metric has been high on several occasions in recent days | Source: CryptoQuant
As shown in the chart above, the flow of Bitcoin exchanges to Coinbase has recorded many sizable spikes over the past few weeks. However, as seen, there was no significant price change after the large deposit.
These spikes were not that big individually. So if the investor making the transfer disposes of the coin after completing the transaction, it should not cause volatility.
However, the number notes that there may be another scenario here. What if those responsible for these inflows have not pulled the trigger on selling? It is not unusual for investors to deposit coins to the exchange in advance, waiting for the right movements in the price to exit.
All these transfers about 20,000 BTC went into the Coinbase wallet. At the current exchange rate, this stack would be worth around $336 million, which would certainly be large enough to cause volatility in crypto prices if sold together.
“Of course, if it is sold after the deposit, the situation will be different, but you have to be careful if it has not been sold,” said the analyst.
The price of BTC
At the time of writing, Bitcoin is trading around $16,800, up 1% over the past week.
BTC seems to have seen a small increase in the last few days | Source: BTCUSD on TradingView
Featured images from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com