Key Points
- Bitcoin’s exchange-to-exchange transactions have significantly dropped, indicating lower trading activity.
- Despite the decrease in transactions, high buying pressure on Bitcoin could potentially lead to price hikes.
Bitcoin’s trading activity has seen a decrease as the cryptocurrency struggles under $96k. The coin’s exchange activity has notably dropped, leading to speculation about the potential impact on its price.
Record Low in Bitcoin Transfers
An analysis by CryptoQuant analyst Woominkyu revealed that Bitcoin’s exchange-to-exchange transactions have significantly dropped. These transactions often align with significant price changes. The analysis pointed out that the first peak in 2017 coincided with Bitcoin’s historical price surge, while the second peak in 2021 matched another significant price movement. However, recent transaction volume has decreased significantly.
Predicting Bitcoin’s Future
The question remains, will this decline in transactions negatively impact Bitcoin’s price? Analysis of CryptoQuant’s data shows that Bitcoin’s net deposits on exchanges are lower compared to the last seven days’ average, suggesting a rise in selling pressure. More investors selling at a profit and long-term holders’ movement being higher than average could potentially have a negative impact.
On the other hand, data from Glassnode paints a different picture. The platform’s accumulation trend score indicator showed a value of over 0.93 at press time. A value closer to one indicates high buying pressure on Bitcoin, which typically results in price hikes.
However, data from Coinglass pointed out a bearish metric. Bitcoin’s Long/Short Ratio registered a sharp decline in the 4-hour timeframe. This suggests more short positions in the market than long positions, which could push the coin’s price down in the short term. If the price decline continues, Bitcoin might drop to $91k.
Despite the potential for a price drop, if the bulls initiate a trend reversal, Bitcoin could potentially retouch the $99.5k-$100k mark, as suggested by the king coin’s liquidation heatmap.