Bitcoin “Exchange Whale Ratio” Is Rising: Why This Could Be Alarming

Source Bitcoinist
Jun 17, 2024 18:30

On-chain data shows the Bitcoin Exchange Whale Ratio has been on the up recently, a sign that could prove to be bearish for the asset’s price.

60-Day MA Bitcoin Exchange Whale Ratio Has Been Rapidly Climbing Recently

As pointed out by an analyst in a CryptoQuant Quicktake post, the Exchange Whale Ratio has seen sharp growth recently. The “Exchange Whale Ratio” is an indicator that keeps track of the ratio between the sum of the top 10 transfers going to exchanges and the total exchange inflow.

The ten largest exchange inflows can be assumed to be coming from the whales, who are entities that carry the largest holdings on the network and thus, also the most influence in the market.

The Exchange Whale Ratio basically tells us about how the exchange inflow activity of these humongous investors compares against that of the entire Bitcoin market.

When the value of this metric is high, it means the top 10 exchange inflows are making up for a significant part of the market deposits. Generally, investors make deposits whenever they want to make use of one of the services that these platforms provide, which can include selling.

As such, the indicator having a high value could imply these large holders are contributing a high amount of selling pressure right now. Naturally, this kind of trend can be bearish for the asset.

On the other hand, the ratio being low suggests the whales are making up for a relatively healthy part of the total exchange inflows, which can have a bullish effect on the price.

Now, here is a chart that shows the trend in the 60-day moving average (MA) of the Bitcoin Exchange Whale Ratio over the past few years:

Bitcoin Exchange Whale Ratio

As is visible in the above graph, the 60-day MA Bitcoin Exchange Whale Ratio has been climbing up on a steep upwards trajectory during the past few months. This would suggest that the whales have been increasing their share of the exchange inflows recently.

The rise in the indicator has come as the price of the cryptocurrency has enjoyed growth and has set a new all-time high (ATH). In the chart, the quant has highlighted what happened during the last few times when the metric witnessed a similar rally.

It would appear that the price of the cryptocurrency has generally seen a steep drawdown whenever the Exchange Whale Ratio has grown to high values. So far, BTC has yet to see a similar decline, although its price has lost its bullish momentum and has been moving sideways recently.

“My guess is that this hasn’t happened because of the huge demand for spot ETFs,” notes the analyst. It now remains to be seen how long the demand will be able to absorb this increasing selling pressure from the whales and if the price would succumb in a similar fashion as in the past when buying does dry up.

BTC Price

At the time of writing, Bitcoin is floating around $65,600, down more than 5% over the last seven days.

Bitcoin Price Chart

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Japanese Yen experiences volatility due to more FX intervention risksThe Japanese Yen (JPY) trims its gains as the US Dollar (USD) strengthens, buoyed by improved Treasury yields. However, the JPY's volatility is anticipated to persist amid speculation of intervention by Japanese authorities following weaker-than-anticipated US Consumer Price Index (CPI) figures.
Author  FXStreet
The Japanese Yen (JPY) trims its gains as the US Dollar (USD) strengthens, buoyed by improved Treasury yields. However, the JPY's volatility is anticipated to persist amid speculation of intervention by Japanese authorities following weaker-than-anticipated US Consumer Price Index (CPI) figures.
placeholder
Oil prices rise amid rate cut cheer, summer demand hopesInvesting.com-- Oil prices rose in Asian trade on Friday amid optimism over U.S. interest rate cuts and improved summer demand, but were still set for weekly losses on some profit-taking.
Author  Investing.com
Investing.com-- Oil prices rose in Asian trade on Friday amid optimism over U.S. interest rate cuts and improved summer demand, but were still set for weekly losses on some profit-taking.
placeholder
China trade balance jumps in June as exports surge; imports weakenInvesting.com-- China’s trade balance grew more than expected in June on surging exports, while imports unexpectedly shrank as local demand remained subdued amid persistent concerns over the economy.
Author  Investing.com
Investing.com-- China’s trade balance grew more than expected in June on surging exports, while imports unexpectedly shrank as local demand remained subdued amid persistent concerns over the economy.
placeholder
Gold prices steady above $2,400 as soft CPI data fuels rate cut betsInvesting.com-- Gold prices fell slightly in Asian trade on Friday, but were sitting on strong gains from the prior session as softer-than-expected U.S. inflation data ramped up bets on a September interest rate cut.
Author  Investing.com
Investing.com-- Gold prices fell slightly in Asian trade on Friday, but were sitting on strong gains from the prior session as softer-than-expected U.S. inflation data ramped up bets on a September interest rate cut.
placeholder
Ethereum Price Rises Amid Challenges: Will ETH Break Above $3,200?Ethereum price extended its increase above the $3,120 resistance zone. ETH could soon aim for a move above the $3,200 resistance.
Author  NewsBTC
Ethereum price extended its increase above the $3,120 resistance zone. ETH could soon aim for a move above the $3,200 resistance.
goTop
quote