On-chain data shows that the Bitcoin exchange’s whale rate has increased, a sign that the whales may now be selling.
The Bitcoin Exchange Whale ratio has been rising in recent days
An analyst in a CryptoQuant after explained that whale influx has been higher than normal lately. The “exchange whale ratio” is an indicator that measures the ratio of the sum of the top 10 exchange inflows to total exchange inflows.
In general, the top ten trades going public are from the whales, so the value of this ratio may provide hints as to how the inflow activity of these giant investors currently compares to the entire market.
When the value of this metric is high, it means that this cohort is a significant part of the total market inflow. Since one of the main reasons investors deposit their coins on these platforms is sales-related purposes, this trend could be a sign that the whales are currently exerting a great deal of selling pressure.
On the other hand, low values imply that whales account for a relatively healthy portion of the total inflow. Depending on other market factors, such a trend could be neutral or bullish for the price of the cryptocurrency.
Now, here is a chart showing the trend in the Bitcoin exchange whale rate over the past few years:
The value of the metric seems to have hit a high peak in recent days | Source: CryptoQuant
The chart above shows that the Bitcoin exchange whale ratio has recently registered a spike. By this latest increase, the metric had nearly passed 0.70, implying that nearly 70% of total FX inflows had come from these giant investors alone.
Of course, if these whales made these deposits to sell their coins, then BTC could feel a bearish effect from this inflow activity. So far, however, the price has not seen a significant drop as it remains within the range it has endlessly consolidated over the past few weeks.
On the chart, the quant has also highlighted instances of Bitcoin’s whale rate rising to similarly high values in recent years.
It seems that BTC price fell shortly after most of these events. In some cases, the bearish effect was delayed, meaning that while the recent spike hasn’t led to a significant price drop, it could happen soon.
It remains to be seen how the Bitcoin market handles this potential high selling pressure from the whales this time around.
BTC price
At the time of writing, Bitcoin is trading around $29,000, down 2% over the past week.
Looks like BTC has continued to move sideways recently | Source: BTCUSD on TradingView
Featured image of Todd Cravens on Unsplash.com, Charts from TradingView.com, CryptoQuant.com