Bitcoin exchange flows reveal new investor trends – What’s next for BTC?

• Bitcoin’s exchange flows serve as a key metric for gauging investor sentiment.
• Currently, outflows indicate a bullish trend – but can it hold?

Bitcoin’s [BTC] price has been ‘extremely’ volatile lately, and exchange flows reveal why. On the 25th of February, approximately 8.4K BTC moved into exchanges, signaling sell pressure. Bitcoin reacted with an 8% drop.

The following day, outflows surged as investors shifted to holding, triggering a rapid reversal. Within a week, BTC rebounded 12%, reclaiming the $94K level.

By looking at the movement of BTC in and out of exchanges, we can get a glimpse into investor sentiment and what might come next.

Bitcoin’s next moves: Insights from exchange flows

Currently, sustained outflows indicate strong bullish momentum, with six consecutive days of red dominance. 

Historically, such patterns have marked Bitcoin bottoms, often leading to sharp reversals and explosive upside moves.

On the chart below, each extended red wick – signifying over 30K BTC withdrawn – has consistently aligned with aggressive “dip-buying” sentiment.

Source: CryptoQuant

Consider the New Year rally: BTC ended 2023 at $93,384. A week later, it soared past $102K, with consecutive red wicks marking over 50K BTC accumulated.

So, is BTC primed for another push past $100K? Recent outflows suggest cautious optimism, with less than 15K BTC exiting exchanges over the past week. 

However, strong distribution followed Trump’s “market manipulation” comments, adding complexity to the short-term outlook.

Identifying next resistance zone

A week ago, Bitcoin dropped to $78K, marking a three-month low. Within four days, BTC posted a strong green candlestick, gaining 9% in a single day and pushing past $96K, driven by Trump’s “pro-crypto” endorsement. 

Profit-taking ensued, and BTC is now 12.5% below that peak, with the majority of the gains erased. 

Current price action suggests resistance around $87K, where over 900K addresses holding 662K BTC are set to move into profit, putting $57 billion worth of BTC at risk of a large sell-off.

Source: IntoTheBlock

Tread carefully – market volatility is at extremes. Exchange flows point to a bullish structure, suggesting the potential to test this resistance in the coming sessions.

However, reclaiming $90K remains a tough hurdle.