Traders return coins to exchanges as Bitcoin moves lower, with CryptoQuant expecting a “small” retracement below $9,000.
Bitcoin (BTC) edging ever closer to $9,000 support may lead to a major sell-off by exchange users, one analyst warns.
According to data from on-chain analytics resource CryptoQuant, inflows of BTC to exchanges spiked on July 15.
Kraken posts unusual $38.5M daily BTC inflows
When traders return Bitcoin to exchanges from a private BTC wallet, it suggests they have a desire to trade or sell at short notice.
The opposite is also true — as Cointelegraph reported, exchange balances witnessed a long-term downtrend which in May hit its lowest since late 2018, when BTC/USD crashed to $3,100.
Now, says CryptoQuant, nervousness over weak price performance appears to be sending a signal to prepare for downward volatility.
Eyeing major trading platform Kraken, data shows that on Wednesday, 4,229 BTC ($38.5 million) entered — far more than the average of 500 BTC ($4.55 million) over the past few weeks.
While order book data is still forthcoming — Kraken may be presenting an anomaly which does not reflect broad trader sentiment — overall conditions are decidedly bearish.
“I expect a small pullback,” CEO Ki Young Ju told Cointelegraph in private comments.
Ki added that should a sell-off begin, he did not foresee it matching that from March, when a cascading short event halved BTC/USD within hours.
“In my opinion, it’ll be around $8,800,” he said.
Bitcoin exchange inflows 3-week chart.