Bitcoin On-Chain Data Shows Decrease In BTC Outflows, Crash Incoming?

Keshav Verma

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Bitcoin on-chain data shows that the BTC outflows have been gradually heading downwards recently, hinting that a crash could be coming soon.

On-Chain Data Shows BTC Outflows Continue To Decrease

As pointed out by an Analyst on Twitter, on-chain data reveals Bitcoin outflows have been gradually going down in the past month.

The relevant metric here is the BTC netflows. This indicator shows the net amount of coins exiting or entering exchange wallets. Its value is calculated by taking the difference between the inflows and the outflows.

When the netflow shows negative values, it means outflows are dominating inflows. This means more Bitcoin is being pulled off exchanges than the amount being put in. Sustained such values have usually been bullish for the crypto.

Positive values, on the other hand, would imply an increase in coins entering exchanges as inflows show more strength than outflows. This can be bearish for BTC’s price.

Now, here is a chart that shows the trend in the value of the BTC netflows over the year:

BTC's outflows seem to be decreasing | Source: Glassnode

As the above graph shows, Bitcoin saw significant outflows over the last couple of months, but lately they have started slowing down.

It seems that during the 2021 bull run, outflows were seen for much of the period. Once netflows started turning green (that is, investors started sending their coins to exchanges for selling), the price crash happened.

If outflows keep going down like they are right now, the indicator might turn back green again. This could lead to another price crash happening soon.

However, it should be noted that the netflows became similarly neutral at many points during the last bull run, but no major correction came. So it remains to be seen if this time the indicator will turn positive or not.

Bitcoin Price

At the time of writing, BTC’s price floats around $62k, up 9% in the last seven days. Over the last month, the crypto has gained 31% in value.

The below chart shows the trend in the price of Bitcoin over the last five days:

BTC's price shows a rather sideways movement over the last few days | Source: BTCUSD on TradingView

After a September filled with multiple crashes, Bitcoin has made some big moves up in this month of October as the crypto is now very close to making a new all time high (ATH). It’s unclear where the coin might head next, but if the netflows start turning positive, a crash could be coming soon.

Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.