Bitcoin is now back above $20,000 after observing a strong uptrend over the past day, but is this pump sustainable? Here’s what on-chain data has to say about it.
Bitcoin All Exchange Netflows Remain Subdued After Price Surge
As one analyst explained in a CryptoQuant post, BTC exchange netflows can help us know whether this short-term uptrend is sustainable or not.
“All Exchanges Netflow” is an indicator that measures the net amount of bitcoin entering or exiting wallets of all centralized exchanges. The value of the metric is calculated simply by taking the difference between the inflows and outflows.
If the indicator has a positive value, it means that investors are currently depositing a net number of coins on exchanges. As these holders may send the BTC to exchanges for sale, this type of trend could have bearish implications for the crypto’s price.
On the other hand, negative net flow values imply that outflows are currently overwhelming inflows. Such a trend, if sustained, can be bullish for the coin as it can be a sign of holder accumulation.
Well, here is a chart showing the trend of bitcoin netflow across all exchanges over the past few weeks:
It looks like the value of the metric increased about a week ago| Source: CryptoQuant
As you can see in the chart above, only the positive scale of the bitcoin exchange netflow is shown as this is a sufficient metric in the context of the current price discussion.
It seems like there haven’t been any significant spikes in the indicator’s value since the cryptocurrency observed the pump. This means that whales have not yet deposited coins for dumping.
About a week ago, there was a fairly large positive surge in net flow, shortly after which BTC bounced back from its small surge.
So far, Bitcoin has not seen any such inflows, which would suggest that the surge could continue in the short-term. However, it remains to be seen how long the whales will sit still.
BTC price
At the time of writing, the price of Bitcoin is hovering around $20.5k, up 7% over the past seven days. Over the past month, the crypto has gained 9% in value.
The chart below shows the evolution of the coin’s price over the last five days.
The value of the crypto seems to have risen sharply in the last 24 hours | Source: BTCUSD on TradingView Featured image by Jievani Weerasinghe on Unsplash.com, Charts by TradingView.com, CryptoQuant.com
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