The Bitcoin exchange whale ratio has been declining sharply in recent months according to on-chain data, which may be a bullish sign for the crypto’s price.
Bitcoin 7-Day MA Exchange Whale Rate Has Rapidly Fallen Recently
An analyst from CryptoQuant pointed this out postThis metric also experienced a similar decline at the end 2018
The “exchange whale ratio” is an indicator that measures the ratio between the sum of the top ten transactions going to exchanges, and the total exchange inflows.
The whales are believed to have made the 10 largest transfers to the exchanges. This ratio shows us how much of the current total exchange inflows are being made by these huge holders.
This metric indicates that the majority of inflows are currently made up of whales if it is high. Because investors often deposit crypto to sell their assets, this could indicate that whales may be selling large quantities. This could make the crypto price bearish.
However, low indicators could indicate that whales are making a greater contribution to the inflows. This could be either neutral, or bullish for BTC’s value.
Below is a chart that illustrates the trend in the 7 day moving average Bitcoin exchange whale rate over the last few decades:
Source:| Source: CryptoQuant
The graph above shows that the Bitcoin exchange whale ratio was at an all-time high just a few short months ago.
Since then, however, the indicator has experienced a rapid downtrend and now the ratio is at a manageable level.
This suggests that the whales are reducing their inflow volumes lately, which could indicate that they may be feeling less pressure to sell.
The trend in the exchange whale rate during the previous Bitcoin cycle has been highlighted by the quant. It looks like there is a similar trend to the one seen in late 2018 when that bear market ended.
The analyst notes that while it’s impossible to say if the current sharp decline in the whale ratio means the bottom is in for this cycle as well, it’s likely that at least the volatility will now begin to cool down.
BTC Price
At the time of writing, Bitcoin’s price floats around $16.8k, down 1% in the last week.
Source:| Source: BTCUSD on TradingView
Featured image by Thomas Lipke on Unsplash.com. Charts and charts from TradingView.com, CryptoQuant.com.