Is Bitcoin Rise Above $20k Sustainable? Here’s What On-Chain Data Says

Bitcoin is now back above the $20k mark after observing some sharp uptrend over the past day, but is this pump sustainable? Here’s what on-chain data has to say about it. Bitcoin All Exchanges Netflows Remain Muted Following The Price Rise As explained by an analyst in a CryptoQuant post, the BTC exchange netflows can help us know whether this short-term uptrend is sustainable or not. The “all exchanges netflow” is an indicator that measures the net amount of Bitcoin entering or exiting wallets of all centralized exchanges. The metric’s value is simply calculated by taking the difference between the inflows and the outflows. When the indicator has a positive value, it means investors are depositing a net number of coins to exchanges right now. Since these holders may be sending the BTC to exchanges for selling purposes, this kind of trend could have bearish implications on the price of the crypto. Related Reading: This Bitcoin On-chain Retest Can Change Market’s Course, Here’s How On the other hand, negative values of the netflow imply the outflows are currently overwhelming the inflows. Such a trend, when prolonged, can be bullish for the coin as it may be a sign of accumulation from holders. Now, here is a chart that shows the trend in the Bitcoin all exchanges netflow over the last couple of weeks: Looks like the value of the metric saw a spike about a week ago| Source: CryptoQuant As you can see in the above graph, only the positive scale of the Bitcoin exchange netflow is displayed, as it’s a sufficient enough metric in the context of the current price discussion. It seems like there have been no significant spikes in the value of the indicator since the crypto has observed the pump. This means that whales haven’t deposited any coins for dumping yet. Related Reading: Bitcoin (BTC) and Shiba Inu (SHIB) Investors Sell And Buy The Hideaways (HDWY) Just a week or so back, there was a pretty large positive netflow spike, shortly after which BTC returned back from its small rise. For now, Bitcoin hasn’t seen any such inflows, which would suggest the rise could continue in the short term. However, it remains to be seen how long the whales will keep sitting still. BTC Price At the time of writing, Bitcoin’s price floats around $20.5k, up 7% in the last seven days. Over the past month, the crypto has gained 9% in value. The below chart shows the trend in the price of the coin over the last five days. The value of the crypto seems to have sharply risen up over the past 24 hours | Source: BTCUSD on TradingView Featured image from Jievani Weerasinghe on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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Author: toutiao