Bitcoin is showing signs of a potential rebound, with several on-chain metrics pointing towards a positive future. These metrics, which often predict price movements, are suggesting a shift in market sentiment.
Exchange Inflows Dropping
One of the key indicators is the amount of Bitcoin flowing into and out of exchanges. Recently, there’s been a sharp decline in the amount of Bitcoin entering exchanges, suggesting that the initial wave of selling might be slowing down.
For example, on August 5th, a massive amount of Bitcoin (94,000 BTC) flowed into exchanges, likely driven by panic selling after Bitcoin dipped below $50,000. This trend continued for the next few days, increasing the selling pressure.
However, things have changed. Data from August 22nd shows a significant decrease in Bitcoin entering exchanges, with more Bitcoin being withdrawn than deposited. This indicates that investors are holding onto their Bitcoin instead of selling, which is usually a bullish signal.
Other Positive Signs
Other on-chain metrics are also painting a cautiously optimistic picture for Bitcoin.
- Bid-Ask Volume: This metric shows a higher volume of buy orders compared to sell orders, suggesting that more people are buying Bitcoin than selling.
- Futures Market Derivatives Momentum: This metric has flipped to a positive value, which is particularly bullish, especially considering the current short squeeze.
What’s Next for Bitcoin?
With Bitcoin currently trading at $61,000 and showing positive momentum, it’s possible that the selling pressure is indeed fading. The combination of positive on-chain metrics and a shift in market sentiment suggests that Bitcoin could be on the verge of a price increase.
