On-chain data indicates that exchanges have seen significant Bitcoin outflows for the third consecutive week as the price continues to recover.
For the Third Week in a Row, Bitcoin Exchange Netflow Remains Negative
According to Glassnode’s most recent weekly analysis, BTC netflow has remained negative for the third consecutive week.
The “exchange net position change” (or simply the netflow) is a metric that indicates the net amount of Bitcoin entering or exiting exchange wallets.
When this indicator is positive, it indicates that exchanges are currently experiencing more inflows than outflows. Such a tendency can be bearish, as investors typically deposit BTC for the aim of selling.
When the indicator’s value falls below zero, it indicates that a net sum of coins is exiting exchange wallets, as outflows exceed inflows.
If this pattern continues, it might be bullish for the cryptocurrency’s price, as investors typically transfer Bitcoin to personal wallets for accumulation purposes.
Now, here is a chart illustrating the year-over-year trend in the BTC exchange’s net position change indicator:
As illustrated in the graph above, Bitcoin’s netflow appears to be fairly negative at the present. This is the third consecutive week that such figures have been seen.
Due to the fact that outflows are often positive, these recent significant ones appear to have been the catalyst for Bitcoin’s rebound from its drop to $33k.
And, if the indicator is currently sustaining at pretty substantial levels, this positive recovery trend may continue.
Bitcoin’s price is hovering around $44.3k at the time of writing, up 1% in the last seven days. The cryptocurrency has increased in value by 3% over the last month.
The chart below illustrates the price trend of BTC over the previous five days.
After briefly rising beyond the $45k level a few days ago, Bitcoin’s price fell below $42k. However, the crypto has seen a significant increase over the last day as it prepares to retest $45k.
At the moment, it is uncertain whether BTC will be able to maintain a price above $45k this time, or if it will fall back down. However, if outflows are any indication, the coin’s outlook appears to be optimistic.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.