Whales Are Sending More BTC to Exchanges: What Could That Mean?

• Whale inflows to crypto exchanges have sustained an elevated inflow bias.
• The inflow bias has been between 4,000 to 6,500 bitcoins per day since June this year.
• Whale netflows to exchanges act as a proxy for the cohorts’ influence on supply and demand.

According to Glassnode, the on-chain and financial metrics platform, Whale inflows to crypto exchanges have sustained an elevated inflow bias of between 4,000 to 6,500 bitcoins per day throughout June and July this year. That is a significant variation from the historical rates of netflows, which oscillated between 5,000 bitcoins and -5,000 bitcoins per 30-days over the last five years.

According to a tweet from the platform, BTC whale netflows to exchanges can act as a proxy for the cohorts’ influence on supply and demand. Glassnode shared a screenshot that summarized the whale exchange flows in July. In the shared example, the whale-to-exchange inflow was 11,900 bitcoins per day, while the outflow was -6,900 bitcoin per day, summing up to a netflow of 5,000 bitcoins per day.

Crypto traders use the Bitcoin netflow metrics to gauge investors’ sentiment. They also use it to spot when Bitcoin whales plan to hold on to their coins or liquidate them. Whales transferring digital assets to crypto exchanges is seen as a sign that they want to sell or exchange them.

Conversely, there is the belief that when Bitcoin whales withdraw their coins from exchanges, they may be moving them to more secure storage. That would suggest they may be willing to hold on to them for long periods.

Based on this logic, Glassnode’s data, which shows a sustained and relatively increased inflow to exchanges, could provide insight into the current market situation. It could explain why Bitcoin has sustained a slightly bearish momentum for most of June and July this year.

Bitcoin reached its yearly high on July 13, when the price of BTC climbed to $31,818. The price has since retraced, dropping below $29,000 before a recent upward movement. Bitcoin traded at $29,478 at the time of writing.