Bitcoin Exchange Inflows Reach $2 Billion Amid Ongoing Profit-Taking Phase

As Bitcoin continues to navigate through recent bearish trends, its price has stabilized above the $86,000 mark. Current on-chain data indicates a significant number of investors have engaged in profit-taking over the past week, contributing to the cryptocurrency's recent double-digit loss.

Key Takeaways

Bitcoin's exchange inflows have surged to approximately $2 billion, with around 20,000 BTC transferred to centralized exchanges recently.
An increase in exchange inflows typically suggests that investors may be selling their assets, which can exert downward pressure on prices.
Bitcoin is currently perceived to be in a profit-taking phase, according to CryptoQuant's CEO.
The Federal Open Market Committee (FOMC) meeting in December is crucial, especially with changing expectations regarding interest rates.

Bitcoin

Bitcoin Exchange Inflows Surge Amid Price Declines

In a recent update on the social media platform X, crypto analyst Ali Martinez noted that a considerable amount of Bitcoin was transferred to centralized exchanges in the last week. Data from Santiment reveals that approximately $20,000 BTC, valued at nearly $2 billion, was moved during this period.

The Exchange Inflow metric is key in this analysis; it tracks how much Bitcoin is flowing into exchanges over a given timeframe. This metric is critical because one of the primary services exchanges offer is the ability to sell cryptocurrencies. A rise in Exchange Inflow often indicates that investors might be offloading their assets, leading to increased supply in the market. If demand does not increase correspondingly, this scenario typically exerts downward pressure on prices.

Further supporting this trend, CryptoQuant’s head of research, Julio Moreno, disclosed that Bitcoin exchange inflows reached about 81,000 BTC on Friday, November 21—the highest level since mid-July. This recent uptick in inflows illuminates the volatility experienced by Bitcoin's price that day, as it succumbed to bearish forces and dropped to just above $80,000 as the weekend approached. Currently, Bitcoin's price is approximately $86,070, reflecting a 2% increase in the last 24 hours.

Profit-Taking Phase for Bitcoin, According to CryptoQuant CEO

CryptoQuant CEO Ki Young Ju stated that Bitcoin is currently in a profit-taking phase, based on the increasing exchange inflows. He made this assertion using the PnL Index Signal, which assesses profit and loss indicators based on the cost basis from all wallets.

Bitcoin Source: @ki_young_ju on X

According to Ju, the current reading from the PnL Index Signal indicates that Bitcoin is approaching a bear market phase, as suggested by classic cycle theories. He further noted that only substantial macro liquidity can disrupt this profit-taking trend, similar to what was seen in 2020. As a result, market participants will closely monitor the upcoming Federal Open Market Committee (FOMC) meeting in December, particularly given the shifting expectations around potential interest rate cuts by the US Federal Reserve.

Bitcoin The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView