Bitcoin Exchange Inflows Surge 3% Amid New All-Time High

On July 15, Bitcoin exchange inflows experienced a significant surge, rising from 54.151K BTC to 63.1K BTC within a 24-hour period, marking an approximate 3% increase. This spike coincided with Bitcoin's price reaching a new all-time high (ATH) of $123.218K on July 14. The data indicated that Bitcoin exchange reserves also increased by 0.91% to 2.265M BTC, following the uptick in exchange inflows. The netflow of Bitcoin to exchanges was positive, increasing by 3.73% to 21.81K BTC, with the mean exchange inflow rising by 2.24 BTC, representing a 3.64% increase. The top 10 exchange inflow metric also showed an increase of 3.17% to 3.656K BTC. Additionally, Bitcoin exchange depositing transactions inched up by 1.03% to 43.552K, while BTC depositing addresses went up by 1.13% to 2.29K. As of the time of publication, Bitcoin exchange inflows stood at 83.99K, an increase of 2.37% from the previous day.

Analysts from CryptoQuant suggested that the surge in exchange inflows indicated a potential "local top," which could result in a "healthy price correction" or near-term consolidation. The spike in BTC exchange inflows, particularly to centralized exchanges (CEXs), was interpreted as short-term profit-taking activity by whales. Another contributor pointed out a wallet that had been dormant for over 14 years, containing 80K BTC, which had recently offloaded about 20K BTC, much of which ended up in CEXs. The recent positive movement in BTC exchange inflows was seen as a classic pattern following parabolic rallies, where profits are realized, weak positions are exited, and BTC prices find a new base. Despite looming signs of price correction, the market structure generally remained largely bullish, with long-term holders continuing to hold onto their BTC.

Another contributor partly agreed that the surge in BTC deposits to exchanges was likely due to activity by large-scale investors. Whales reportedly deposited 1.8K BTC to Binance in one day, with over 35% of the transactions exceeding $1 million. The analyst claimed that whales leveraged the deep liquidity in exchanges to speculate, possibly for profit-taking. The contributor also concluded that the surge was likely due to two scenarios. First, investors likely sat on “healthy profits” and sought to make some profit. Secondly, investors possibly aimed to leverage Binance’s liquidity to open positions or hedge amid heightened market volatility. The Head of Research at CryptoQuant believes that rising BTC exchange inflows precede price volatility.

An independent crypto analyst claimed that the wave of BTC hitting exchanges usually suggested that wallets were preparing to sell. The analyst pointed out a similar spike in March 2024, followed by a drop of 8-12% within 48 hours. Large holders likely sent BTC to “spot venues” to rotate or liquidate. On July 11, the Head of Research at CryptoQuant said that daily BTC exchange inflows fell to their lowest since April 2015, plummeting to 18K BTC. He also revealed that large Bitcoin holders were sending fewer coins to exchanges, with the amount coming from this group falling to only 7K BTC, down from 62K BTC in November last year. The increase in BTC price resulted in low selling pressure, with whale activity having dropped. However, this trend was common across the crypto industry. The current BTC rally was much calmer than the early 2021 and late 2017 bull runs. Fewer daily BTC flows from large and small holders to exchanges signaled less selling pressure and implied that the market had yet to enter “overheating mode.”