On-chain analysis shows that crypto exchange Gemini observed huge Bitcoin inflows just before the plunge down to $38k.
Huge Bitcoin Inflows To Gemini
As pointed out by a CryptoQuant post, crypto exchange Gemini saw huge inflows earlier today resulting in a positive spike in the netflows.
Before examining the data, here are some quick definitions for the relevant terms. The exchange inflow is the amount of BTC sent from personal wallets to the exchange platform.
Similarly, the outflow is the BTC that was transferred out of exchanges to personal wallets. The netflow is just the difference between the value of the inflow and the outflow.
When the value of the netflow is positive, it means more BTC is entering the exchange than exiting. Such a spike would mean that investors want to sell off their Bitcoin, and thus there is a selling pressure in the market.
On the other hand, when this indicator is negative, it implies a buying pressure in the market as more BTC is traveling out of exchanges than in.
Now, here is how the Bitcoin netflow chart for the Gemini crypto exchange looks like:
The Gemini BTC netflow notices a huge positive spike | Source: CryptoQuant
As the above graph shows, Gemini has just witnessed a spike in the Bitcoin netflow. Interestingly, BTC’s price plunged down to $38k from just under $40k right after these inflows.
Related Reading | 8 Green Candles: Here’s What Happened The Last Time In Bitcoin
The chart also shows that the other big positive netflows also seem to have been followed by drops in the crypto’s price. This does make it seem like there is a correlation between the netflows on Gemini and BTC’s price.
BTC Price
At the time of writing, the Bitcoin price floats around $k, up % in the last 7 days. The cryptocurrency’s gains for the month are around %.
Here is a chart that shows the trend in the price of BTC over the last 24 hours:
BTC witnesses a sharp fall from about $40k to $38k | Source: TradingView
After being range bound for quite the while, Bitcoin finally saw some significant price movement as its price touched $40k. The cryptocurrency has seen 9 up days, something the coin hasn’t seen since 6 years ago.
However, today it seems like BTC has finally dropped a little so today won’t be a positive day. As explained before, this plunge down to $38k is likely due to the Gemini inflows.
Related Reading | TA: Ethereum (ETH) Outpaces Bitcoin, Why Bulls Aim Larger Increase
In the past, there have been similar instances where Gemini inflows caused sharp downtrends. However, they don’t necessarily mean a drop will happen. It could still be worth keeping an eye on the crypto exchange’s netflow for any possible hints, nonetheless.
