The number of Bitcoin addresses depositing BTC to crypto exchanges has doubled since the beginning of 2020. This is according to the team at Glassnode who also added that approximately 100,000 unique Bitcoin addresses send BTC to crypto exchanges on a daily basis. Furthermore, the last time such an influx of BTC to exchanges was witnessed, was during the peak of the 2017 bull market.
The team at Glassnode shared this observation via the following tweet with an accompanying chart that shows the daily number of addresses depositing BTC to exchanges.
The number of #Bitcoin addresses depositing funds to exchanges has doubled since the beginning of the year.
Currently, around 100k unique addresses send $BTC to exchanges each day.
Last time we saw these levels was during the peak bull market of 2017.https://t.co/twjt4mQtFn pic.twitter.com/x19mnDMluM
— glassnode (@glassnode) September 22, 2020
The Recent Bitcoin Pullback Originated from ‘Inside’ Crypto Exchanges
The recent Bitcoin pullback from $11,000 levels to a local bottom around $10,300 caught many crypto analysts off-guard, specifically those who rely on on-chain data to anticipate major BTC moves. What usually happens before such as sell-off, is the rapid transfer of large amounts of Bitcoin as is so often seen with BTC miners. However, this was not the case this past week.
According to veteran Bitcoin analyst, Willy Woo, the recent pullback originated from within exchanges further providing a link with the analysis of the team at Glassnode that points towards continual Bitcoin deposits to exchanges since the beginning of the year.
Bitcoin traders could be transferring their BTC and setting limit orders to maximize on their Bitcoin profits in anticipation of a potential bear market brought about by an uncertain stock market.
Mr. Woo shared his analysis of the recent pull-back via the following tweet.
This latest pull back did not come with the usual movement of coins on-chain, the sell-off therefore was fueled from coins on exchanges. Without large volumes of coins moving from wallets I cannot see sufficient sell-side supply to push prices down with much gusto. pic.twitter.com/ANhugKdJxw
— Willy Woo (@woonomic) September 23, 2020
$7k Highly Unlikely for Bitcoin
In terms of the short term price of Bitcoin, there have been a few calls for BTC dropping hard below the psychological price level of $10k and even as far down as $7,700. However, Mr. Woo sees the latter scenario highly unlikely as explained below.
While I’ve heard talk of bearishness down to even 7k, I don’t see fundamentals supporting this as a likely event.
On spot markets (Binance listed below), we have plenty of bids below this level and a liquidity gap above through to 10.8k-11k.