On-chain data shows that the Bitcoin Exchange Whale ratio has been increasing recently, a sign that could prove bearish for the asset’s price.
MA Bitcoin 60-Day Whale Trading Ratio Rising Rapidly Recently
As one analyst pointed out in a CryptoQuant Quicktake job, the Exchange Whale ratio has seen strong growth recently. THE “Exchange Whale Ratio” is an indicator that tracks the ratio between the sum of the top 10 transfers to stock exchanges and the total inflow of currencies.
It can be assumed that the ten largest foreign exchange inflows come from whaleswhich are the entities that hold the largest stakes in the network and therefore also the greatest influence on the market.
The Exchange Whale Ratio essentially tells us how the trading inflow activity of these huge investors compares to that of the entire Bitcoin market.
When the value of this measure is high, it means that the top 10 currency inflows account for a significant share of market deposits. Typically, investors make deposits every time they want to use any of the services provided by these platforms, which may include selling.
As such, the indicator having a high value could imply that these large holders are currently contributing to strong selling pressure. Naturally, this type of trend can be bearish for the asset.
On the other hand, the low ratio suggests that whales represent a relatively healthy share of total exchange flows, which may have a bullish effect on the price.
Now here is a chart that shows the trend of the 60-day moving average (MA) of the Bitcoin Exchange Whale ratio over the past few years:
Looks like the 60-day MA value of the metric has been trending up over the last few months | Source: CryptoQuant
As seen in the chart above, the 60-day MA Bitcoin Exchange Whale ratio has been on a steep upward trajectory over the past few months. This suggests that whales have recently increased their share of trade flows.
The rise in the indicator came as the price of the cryptocurrency saw growth and established a new absolute record (ATH). In the chart, the quant highlighted what happened over the last few times the metric saw a similar rally.
It appears that the price of the cryptocurrency has generally seen a sharp decline whenever the Exchange Whale ratio has reached high values. So far, BTC has yet to experience a similar decline, although its price has lost bullish momentum and has recently been moving sideways.
“I guess this didn’t happen due to the huge demand for spot ETFs,” the analyst notes. It now remains to be seen how long demand will be able to absorb this increasing selling pressure from the whales and whether the price will succumb in the same way as in the past when buying dries up.
BTC Price
At the time of writing, Bitcoin is floating around $65,600, down more than 5% over the past seven days.
The price of the coin has continued to be stuck in its consolidation range recently | Source: BTCUSD on TradingView
Featured image of Dall-E, CryptoQuant.com, chart from TradingView.com
