Bitcoin Inflow To Exchanges At 2016 Levels, Impact On Price Will Be Low Even If Mt. Gox Sells
29 May 2024 - 7:00AM
NEWSBTC
Bitcoin briefly shot over $70,000 yesterday before plunging below
$69,000 to spot rates. While there are hints of weakness, one
analyst on X notes that inflow to exchanges like Binance and OKX is
subdued, meaning that users are not keen to sell despite prices
tanking and failing to break $72,000. Bitcoin Inflow To Exchanges
Remain Low The analyst notes that exchange inflows are low at spot
rates. As of May 28, exchanges received just 25.9K BTC daily. From
historical exchange inflow data from CryptoQuant, the current
inflow rate is at the 2016 level. There was a sharp pick-up
in momentum after 2016, but the inflow to exchanges has been
shrinking since the beginning of the year. It should be noted that
the United States Securities and Exchange Commission (SEC) approved
nine spot Bitcoin exchange-traded funds (ETFs) around this
time. Related Reading: Bullish Bitcoin: Expert Cites $123,832
Target Based On Past Trends With this product in the United States,
some large whales likely decided to convert their coins and hold
ETFs instead. In this way, they diverted custody to an approved
custodian, depending on the spot Bitcoin ETF issuer they chose. Mt.
Gox Moving BTC: How Will Prices React If They Sell? While the
average inflow to exchanges is at 2016 levels, there might be
changes in the coming months. On May 28, Mt. Gox, the defunct
crypto exchange hacked in 2014, moved over $9.4 billion of BTC,
data from Token Unlocks show. This unexpected transfer sparked
market concerns. Currently, the intention remains unknown. Still,
the implications could be dire if they decide to liquidate on
exchanges. Even with this possibility, the analyst argued that
BTC’s low average exchange inflow to exchanges would be a timely
cushion. Should Mt.Gox creditors decide to sell, the analyst
believes the market will easily absorb this sell-off despite
increased initial volatility. What this means is that the price
impact will be minimal. Related Reading: Polkadot (DOT) Price
Prediction: Analyst Sparks Bullish Frenzy With $10 Target Before
being hacked and losing over 800,000 BTC, Mt. Gox was a popular
Bitcoin exchange. At one point, it commanded over 70% of all global
BTC trading volume. In the next few months, victims of the
unfortunate hack will be compensated. Feature image from DALLE,
chart from TradingView
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