Bitcoin Exchange Inflows Decline Sharply in August

August 23, 2024 04:35 PM AEST | By Team Kalkine Media

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Bitcoin exchange inflows provide insight into potential selling pressure within the market, with high inflows often signaling increased selling pressure, while lower inflows suggest reduced selling activity.

Recent data shows a notable decline in Bitcoin exchange inflows since early August. According to CryptoQuant, significant inflows were observed on August 4, with nearly 94,000 Bitcoin transferred to exchanges. This was followed by approximately 49,000 Bitcoin on August 5 and about 51,000 Bitcoin on August 6. However, exchange inflows have diminished considerably since then, with recent figures from August 20 indicating that only 31,000 Bitcoin were sent to exchanges. This decrease in inflows points to a reduction in selling pressure within the market.

The impact of fund transfers from the Mt. Gox bankruptcy estate has been a focal point of recent discussions. On August 20, Mt. Gox moved 12,000 Bitcoin to unknown wallets, marking the first such movement from the defunct exchange in over three weeks. Data from Arkham Intelligence shows that Mt. Gox-associated wallets still hold approximately 44,899 Bitcoin. Despite the high-profile nature of these transfers, there has been no mass sell-off by Mt. Gox creditors, who appear to be holding their Bitcoin. Lukas Enzersdorfer-Konrad, deputy CEO of Bitpanda, suggested that the demographics of these creditors—primarily early adopters of decentralized technology—might explain the lack of immediate sell-off, as they have awaited their reimbursement for a decade.

Additionally, rumors of a potential U.S. government sell-off emerged after a transfer of 10,000 Bitcoin to an unmarked wallet address on August 14. Some analysts, however, argue that this transfer might be related to custody management rather than an indication of intent to liquidate the holdings. Ryan Lee, chief analyst at Bitget Research, noted that such transfers could simply reflect internal custodial adjustments rather than a market move by the U.S. government.

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