Short-Term Holders are Sending Their Bitcoins to Exchanges

• Glassnode data shows that short-term holders are transferring their Bitcoins to exchanges.
• The current inflow metric on Glassnode recorded a 0.82% value.
• Short-term holders sending their Bitcoins to exchanges suggests an impending liquidation.

Glassnode data shows that more short-term holders are transferring their Bitcoins to exchanges. A Twitter post reveals that the current inflow metric on Glassnode recorded a 0.82% value. That is the highest it has reached since the beginning of April 2023.

Despite the relatively high value of the metric, it remains low when compared with other historical periods. Some periods recorded on Glassnode include the LUNA/FTX capitulation and the subsequent relief rally.

The crypto exchanges experienced a capitulation inflow of 1.8% during the LUNA crash, while the figure was 1.47% after the FTX collapse. Both events happened at different periods in 2022.

The other period when the short-term holder balance sent to exchanges rose significantly was in March 2023 during a relief rally. Then, Bitcoin surged to its yearly high before pulling back into consolidation.

The short-term holder balance sent to exchanges is a metric used to measure traders’ behavior. Traders also use it to predict the prevailing supply and demand sentiment in the Bitcoin market.

When short-term holders send their Bitcoins to exchanges, it suggests an impending liquidation. Oftentimes, traders could exchange Bitcoins for stablecoins to escape anticipated volatility or prepare for an altcoin season. They do not use the metric in isolation, but combine it with other on-chain information to understand which options are applicable.

The recent Glassnode tweet was silent on why short-term holders are sending their Bitcoins to exchanges. However, the ongoing FUD resulting from the SEC’s attack on Coinbase and Binance could be playing a significant role.

There is currently no significant impact resulting from the FUD, as blocks continue to finalize normally on the Bitcoin network.