Bitcoin risks further decline due to high deposits on whale exchanges
CryptoQuant analysts warned that continued pressure from whales on Bitcoin could lead to a further decline in the asset's value.
Cryptocurrency inflows into the exchange peaked at $9,000 on November 21 as the price of bitcoin on Coinbase fell to $80,600, its lowest in seven months, according to a market report on Wednesday.
When inflows into a cryptocurrency exchange increase, it is often a sign that investors are preparing to sell, while the opposite situation occurs when outflows from the exchange increase.
CryptoQuant data shows that 45% of the total BTC volume sent to exchanges was generated by large deposits of 100 BTC or more, reaching 7,000 BTC in a single day. This suggests that a group of whales was sending coins to exchanges in preparation for a sale.
“This suggests that investors and traders continue to sell Bitcoin amid the current decline, putting further downward pressure on the price.”
As a result, the average value of a BTC deposit in November reached 1.23 BTC, the highest level in a year, the company added.
Recently, exchanges have seen large BTC deposits. Source: CryptoQuant.
Binance stablecoin reserves peak
CryptoQuant also noted on Wednesday that Binance's stablecoin reserves just reached a record $51 billion, the highest level ever. BTC and ETH inflows this week rose to $40 billion, led by Binance and Coinbase.
High stablecoin holdings on exchanges indicate a shift away from Bitcoin and altcoins toward dollar-backed assets, where capital is often held until market participants are ready to reenter.
Earlier this week, analyst James Chek noted the presence of residual leverage that has not yet been removed from the markets.
“We wouldn’t be too surprised if we manage to get into the $70,000 to $80,000 zone to get out the rest of the leverage,” he said.
Meanwhile, BitMine Chairman Tom Lee softened his $250,000 Bitcoin price target, saying that even a return to the all-time high by the end of the year is only “possible.”
A similar inflow scheme for Ethereum and altcoins
The analytics platform noted a similar trend in deposit inflows to the Ethereum exchange, “although the overall inflow has not increased significantly.”
Other altcoins have also seen an increase in inflows into exchanges this month as the sell-off intensified, sending many of them back to bear market lows.
Earlier this week, 10x Research said Bitcoin's “tactical oversold bounce” was still ongoing, citing $92,000 and $101,000 as key resistance zones.
BTC has recouped $90,000 and is trading slightly above that level at the time of writing.
Source: cryptonews.net
