Following the recent bearish Bitcoin price action, many people blame Elon Musk for tweeting half-truths. In reality, this market volatility seems to come from elsewhere. More addresses sending to exchanges are problematic, and this trend has been brewing for some time now.
BTC Addresses Sending To Exchanges Spike
It is always worth looking at how many people send Bitcoin to trading platforms and exchanges over certain periods. Even though the Bitcoin price has become somewhat less volatile over the years, there is still a growing demand for scalping profits whenever possible. As a result, there will be spikes in the number of addresses sending to exchanges during certain periods.
Per Glassnode, we are currently at a three-year high for addresses sending to exchanges. Although that isn’t necessarily surprising, it does indicate this ongoing volatility will not relent anytime soon. Several reasons may contribute as to why people are eager to move BTC to trading platforms today.
First of all, there is the current price. Although the BTC all-time high is $14,000 away from the current value, a $50,000 price tag is still more than respectable for the world’s leading cryptocurrency. Many people acquired Bitcoin well below this price and may deem it time to start cashing out [some of their] profits. After all, it has proven difficult for BTC to surpass $60,000 again since hitting that all-time high.
A second reason may be due to people diversifying their Bitcoin balances. As all other crypto assets note similar or even bigger losses than Bitcoin, there are opportunities to diversify. Opting for this method can help traders increase their Bitcoin holdings if those alternative assets bounce back. It is a common tactic among Bitcoin users to keep improving their BTC holdings by any means necessary.
Bitcoin Miners Aren’t Helping
As was somewhat to be expected at this time, the Bitcoin miners’ outflow is on the rise again. A new monthly high has been recorded at 64.514 BC per the seven-day moving average. As prices continue to fall, miners will be quicker to convert their BTC earnings to fiat currency and cover operational costs. The lower the Bitcoin price goes, the higher the overall outflow will be.
As the miner outflow increases, it contributes to the number of addresses sending to exchanges. However, the increase in that metric is not just due to miners, as they only play a minor role in these proceedings. For now, it seems unlikely this inflow of Bitcoin across exchanges will dry up. More volatility is likely to occur, with prices likely to go lower in the process.
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