Bitcoin has wiped off all the gains it made after the Grayscale victory over the SEC. Leading up to the fact, several thousands of BTC were sent to crypto exchanges primarily driven by investors seeking to capitalize on the positive news as many anticipated a favorable outcome.
Interestingly, this influx of BTC into exchanges shows no signs of slowing down.
No Respite
Bitcoin’s “Exchange Net Flow” (1d MA) metric just reached a 1-month high of $9.75 million, breaching the previous milestone of $8.89 million was observed on August 1st, according to Glassnode Alerts.
📈 #Bitcoin $BTC Exchange Net Flow (1d MA) just reached a 1-month high of $9,756,459.33
Previous 1-month high of $8,892,579.21 was observed on 01 August 2023
View metric:https://t.co/IOuUPsnPKM pic.twitter.com/sVD4NmorIn
— glassnode alerts (@glassnodealerts) September 1, 2023
In terms of BTC sent to exchanges, Glassnode reported that the amount has neared 370 BTC, which is a 4-month peak.
📈 #Bitcoin $BTC Exchange Net Flow (1d MA) just reached a 4-month high of 369.461 BTC
Previous 4-month high of 355.407 BTC was observed on 28 July 2023
View metric:https://t.co/YUEyldv0jg pic.twitter.com/yxHGYeG3uH
— glassnode alerts (@glassnodealerts) September 1, 2023
The metric gauges the overall flow of Bitcoin into and out of centralized exchange wallets, and its value is determined by subtracting outflows from inflows. A high positive figure signifies an increasing reserve. For a spot exchange, a significant net flow implies growing selling pressure.
Another factor that may have fueled the bearish sentiment among investors is the US Securities and Exchange Commission’s move to postpone ETF decisions that were originally anticipated for Friday, casting a shadow over traders’ prospects for a sustained market rebound.
As reported earlier, bitcoin slumped by over $2,000 from its intraweek high at over $28,000 and erased all the Grayscale-propelled gains.
Bitcoin Velocity Hit Multi-Year Low
Bitcoin velocity has reached a three-year low – reaching levels not seen since August 2020. Data from CryptoQuant suggested that the figure currently stands at 23.80 and is yet to reach the historical low of 19.80.
According to CryptoQuant’s Ki Young Ju, there are two ways to view this situation. “It can be seen as positive since whales are holding onto it, or negative since it’s not being transferred to new investors.”
Furthermore, the Average Dormancy metric has risen, which essentially implies that investors who have been holding BTC for a long time are inclined to sell the token to make a profit.
It is also worth noting that ‘Dormancy’ remained at elevated levels despite a sharp drop in Velocity during the 2023 rally. Although the current price is below the 2021 all-time high (ATH), it’s evident that long-term BTC holders are capitalizing on the surge and are “changing hands.”
“The market psychology is atrophied, the turnover rate has fallen, and the old hands are changing hands, it seems to be a somewhat difficult condition to appear in a strong rise right now.”
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