Sunday, September 25, 2022

On-Chain Data Shows Bitcoin Whale Dumping Behind Dip Below $19k

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On-chain data shows the Bitcoin exchange whale ratio spiked up just before the crypto’s plunge below the $19k level.

Bitcoin Exchange Whale Ratio Breached 90% Right Before The Price Dip

As pointed out by an analyst in a CryptoQuant post, the whale activity on exchanges has been raised recently.

The “exchange whale ratio” is an indicator that measures the ratio between the top ten inflow transactions to exchanges and the total exchange inflows.

The ten biggest transfers are assumed to be from the whales, so that the metric tells us what part of the total number of coins moving into exchanges is coming from these humungous holders.

When the value of this indicator is high, it means a large part of the inflows is coming from whales right now. Such a trend can be a sign of dumping from this cohort and can therefore be bearish for the price.

On the other hand, low values of the ratio can suggest whales are making up a healthy part of the transactions to exchanges at the moment. This kind of trend can either be bullish or neutral for the crypto’s value.

Historically, the metric has usually had values above 0.85 during bear markets or fake bulls, while it has generally remained below this threshold during bull runs.

Now, here is a chart that shows the trend in the Bitcoin exchange whale ratio over the last couple of months:

Bitcoin Exchange Whale RatioThe value of the metric seems to have been elevated recently | Source: CryptoQuant

As you can see in the above graph, the Bitcoin exchange whale ratio surged up yesterday and hit a value of 0.9, implying that whales contributed 90% of the inflows to exchanges.

This spike in the indicator came not too long before the plummet in the price of the coin below $19k, suggesting that dumping from whales may have been behind the drop.

The ratio has also remained elevated since then, which could mean the cohort is continuing to deposit to exchanges, something that could prove to bearish for BTC.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.3k, down 4% in the last seven days. Over the past month, the crypto has lost 17% in value.

The below chart shows the trend in the price of the coin over the last five days.

Bitcoin Price Chart

Looks like the value of the crypto has rebounded back a little to above $19k again since the plunge yesterday | Source: BTCUSD on TradingView
Featured image from Karl-Heinz Müller on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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