After a brief period of optimism following a decline in the Bitcoin market on October 10, the cryptocurrency appears to be heading into the weekend with a distinct bearish sentiment. Recent on-chain analysis indicates that Bitcoin faces a heightened risk of further bearish pressure, which could lead to significant corrections in the upcoming weeks.
In a recent post on the social media platform X, an anonymous on-chain analyst known as Darkfost highlighted a notable increase in Bitcoin inflows on the Binance exchange. According to the Binance Exchange Inflow — Spent Output Age Bands metric, which monitors the volume of Bitcoin being moved to Binance alongside the age of the coins, there has been a surge in inflows from long-term holders. Specifically, the 7-day moving average of these inflows has escalated to around 40 BTC per day, up from a mere 4 BTC per day in a short time frame.
This sharp increase in inflows is significant, especially considering that long-term holders control more than 80% of Bitcoin’s total supply. The actions of these investors can considerably influence market volatility. Darkfost elaborated on the implications of this trend, noting historical patterns that suggest rising inflows into exchanges often correlate with increased selling pressure. Transfers to exchanges typically indicate a readiness to sell, functioning as platforms for investors looking to make quick profits or liquidate part of their holdings.
The movement of long-term holders’ assets to exchanges generally involves substantial quantities, hinting at a deliberate strategy. Notably, the recent rise in Binance inflows occurred just prior to a round of profit-taking by long-term holders, a factor that contributed to the latest Bitcoin market crash along with the reintroduction of older Bitcoin back into the market supply.
Analysis of recent inflow levels suggests they are stabilizing at robust figures. While this might offer a temporary sense of security, Darkfost cautions observers to monitor for continued upward trends in these inflows. An acceleration could signify a shift in the positioning of long-term holders, potentially signaling the onset of a distribution phase in the near future.
At the time of reporting, Bitcoin is trading at approximately $107,085, marking nearly a 2% decrease over the last 24 hours. The market’s direction remains uncertain as investors remain vigilant for further developments.
