Exchange Inflows Rock Bitcoin, Ethereum As Market Struggles To Recover
With the market in turmoil, digital assets such as Bitcoin and Ethereum are seeing their prices challenged in ways that have sent shivers down the spines of investors. The downtrend had triggered massive sell-offs that had sent prices towards yearly lows. Despite the volume already being sold off, sellers look to not be done yet. This is evidenced by the volume of Bitcoin and Ethereum that has been making its way to centralized exchanges recently.
Bitcoin, Ethereum Rocked By Inflows
The inflows had been growing steadily recently and given the volume that has been going into exchanges, this growth is alarming. Top coins Bitcoin and Ethereum usually hold up best when it comes to markets like this, and though they have held up, investors seem unconvinced that they would continue to do so. This is one of the reasons why the inflows have been massive.
Data shows that more than $1.4 billion worth of Bitcoin has flowed into centralized exchanges in the last 24 hours alone. Although this is a decline from the previous day when $1.7 billion in BTC had been moved into exchanges, it significantly surpassed the outflow rate compared to the previous day.
Related Reading | How The Tether Peg Could Predict Raging Bitcoin Volatility
Outflows for bitcoin for the last 24 hours came out to $1.2 billion. What this led to was a positive net flow of $233 million.
Ethereum was not left out of this either. If anything, the second-largest cryptocurrency by market cap has been worse hit by exchange inflows. For the previous day, its inflows had touched $569 million. But unlike Bitcoin, it did not record enough outflows to offset this figure.
BTC continues downtrend | Source: BTCUSD on TradingView.com
This would continue into the Wednesday market which saw $658.2 million flowing into centralized exchanges. In the same time period, there was $651.1 million flowing out of the exchanges, which left a positive network of $7.2 million.
USDT Outflows Spell Selling
One way to indicate if investors are selling or buying Bitcoin, Ethereum, and other digital assets is through the stablecoin inflow, and lately, this flow rate has been anything but encouraging. Tuesday saw $1.1 billion USDT flowing into exchanges, marking a significant figure but the outflows came out higher. In total, there was $1.7 billion in USDT leaving exchanges, resulting in a negative $612.1 million net flow.
Related Reading | Funding Rates Fall To Yearly Lows Following Bitcoin’s Fall Below $29,000
What metrics like this show is that investors are likely turning their volatile cryptocurrencies into these stablecoins and moving them out of the exchanges for safekeeping. Mostly to provide shelter from a highly volatile market.
Nevertheless, the USDT volumes from the last 24 hours are beginning to paint a slightly better picture. While outflows had reached as high as $738.5 million for the past day, inflows were $871.4 million, a positive net flow of $132.9 million. If this trend continues, then the current selling trend could well be turned around into a buyer’s that would hopefully trigger a recovery in the market.
📊 Daily On-Chain Exchange Flow#Bitcoin $BTC
➡️ $1.4B in
⬅️ $1.2B out
📈 Net flow: +$223.0M#Ethereum $ETH
➡️ $658.2M in
⬅️ $651.1M out
📈 Net flow: +$7.2M#Tether (ERC20) $USDT
➡️ $871.4M in
⬅️ $738.5M out
📈 Net flow: +$132.9Mhttps://t.co/dk2HbGwhVw
— glassnode alerts (@glassnodealerts) May 19, 2022
Featured image from News Central TV, chart from TradingView.com
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