On-chain data shows Bitcoin netflows are still deeply negative, a sign that means BTC remains bullish. This is despite the dip to $44k.
Exchanges Observe Deeply Negative Bitcoin Netflow
As per a CryptoQuant post, the Bitcoin netflow indicator has been deeply negative recently, suggesting that signs are still overall bullish for the market.
Related to the netflow are two other indicators, the outflow and the inflow. The first one is defined as the total amount of BTC flowing out of exchanges towards personal wallets.
Related Reading | Hot Bitcoin Summer. But Why Altcoins Are On The Rebound
When the value of this metric goes up, it means more investors are interested in hodling or selling through OTC deals.
The inflow indicator is just the opposite; it is the amount of Bitcoin moving from personal wallets to centralized exchanges. When the value goes up, it implies more investors want to sell their coins or exchange for altcoins.
The netflow is calculated by subtracting the inflow from the outflow. When this indicator has a negative value, it indicates there are more outflows happening than the inflows. Such a situation could signify there is a buying pressure in the market.
Related Reading | Will Ethereum Reach Its All-Time-High Before Bitcoin?
On the other hand, a positive value happens when inflows are overwhelming the outflows. Thus, a positive value could mean there is a buying pressure in the market.
Now, here is how the chart for all exchanges BTC netflow looks like after taking a 30-day moving average to smooth out the curve:
The BTC netflow shows negative values | Source: CryptoQuant
Looking at the above graph, it seems like Bitcoin has started to catch a negative netflow trend with the values getting deeper more recently.
Also, the chart shows some interesting correlations with the price of the coin over the past year. Before the bull run started, netflows were very negative. And when the crash happened, the curve became highly positive.
Considering the above trends, it could possibly mean that decently negative values like right now could be bullish for the price.
At the time of writing, BTC’s price floats around $45.5k, up 3% in the last 7 days. Over the past month, the cryptocurrency has amassed 53% in gains.
Below is a chart that shows the trends in the price of Bitcoin over the past three months:
BTC's price zig-zags its way downwards | Source: BTCUSD on TradingView
After stagnating around the $47k price mark, Bitcoin’s value seems to be going down. Right now it’s unclear how long this trend might last. If the netflows are anything to go by, signs still seem to be bullish for the cryptocurrency.
Featured image from Unsplash.com, charts from CryptoQuant.com, TradingView.com
The post Despite Dip To $44K, On-chain Data Suggests Bitcoin Still Bullish appeared first on BitcoinLinux.