- Bitcoin saw higher currency outflows compared to inflows as demand began to recover.
- Derivatives remained weak as the micro strategy dominated the spot market.
The selling pressure we saw in Bitcoin [BTC] This week may be short-lived. New data suggested that the pace at which BTC flows out of exchanges is starting to accelerate.
AMBCrypto’s previous analysis suggested that Bitcoin was likely to experience a resurgence of buying pressure between the price range of $59,896 and $61,801.
However, a pullback on August 1 indicated increasing buying pressure. This led to a look at the on-chain data, which confirmed that demand for Bitcoin was once again increasing.
Our review found that Bitcoin’s total outflow volume peaked at 24370 BTC over the past 24 hours.
This means that this week’s outflows from BTC exchanges are again close to the highest level observed on July 29 at 26,530 BTC.
Source: IntoTheBlock
The same Bitcoin metric reached higher lows in the second half of June. This could indicate that any selling pressure since then has weakened.
If that is the case, Bitcoin’s potential downside will be limited. This could pave the way for more upside potential. However, it also requires a comparison with the inflow volumes of BTC on the exchange.
Aggregated Bitcoin inflow volumes showed that inflows reached a monthly peak of 59,460 BTC on July 24.
Source: IntoTheBlock
The latest data indicated that 15,950 BTC flowed into the exchanges. This confirmed that foreign exchange outflows exceeded inflows, thus having a net positive effect on asset demand.
Who buys?
AMBCrypto’s findings based on the above data coincided with declining foreign exchange reserves. However, the derivatives segment indicated that demand was still weak.
Open interest was still trending downward at the time of the observation. Financing rates had also fallen, indicating that there was some uncertainty regarding the rate at press time.
Source: CryptoQuant
All this indicated that most of the prevailing demand came from the spot market. Taurus love MicroStrategy have benefited from the dips.
The company’s chairman, Michael J. Saylor recently unveiled that the company added 169 BTC to its treasury. In other words, the company now owns approximately 1.14% of the current circulating supply of Bitcoin.
MicroStrategy also announced that it plans to proceed with the purchase. The company planned to issue more shares worth about $2 billion, which it plans to use for more Bitcoin purchases.
Read Bitcoin’s [BTC] Price forecast 2024-25
Keep in mind that while the current demand for Bitcoin is putting enormous selling pressure on it, a significant amount of selling still occurred.
Juli also confirmed that there are still bearish factors in the market that have the potential to cause sell-offs. Governments selling their BTC shares and economic data are some examples.