Bitcoin Coinbase Inflows Spike, Is This Bearish For BTC?

Keshav Verma

1 year ago

3 mins read

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On-chain data shows the Bitcoin inflows to Coinbase have spiked recently, a sign that may turn out to be bearish for the crypto.

Bitcoin Exchange Inflows To Coinbase Register High Values

As pointed out by an analyst in a CryptoQuant post, a total of 20k BTC was transferred to Coinbase recently. The “exchange inflows” is an indicator that measures the total amount of Bitcoin currently being transferred to an exchange (which, in this case, is Coinbase).

When this metric’s value is high, investors send many coins to the exchange right now. Since one of the main reasons holders deposit to exchanges is for selling-related purposes, this trend can have bearish implications for the price of the crypto.

On the other hand, low values suggest investors aren’t making many deposits to the exchange. Such a trend could either be bullish or neutral for BTC, depending on whether the market-wide inflows are also down or not.

Now, here is a chart that shows the trend in the Bitcoin inflows to the crypto exchange Coinbase over the last couple of months:

Looks like the value of the metric has been high on several occasions in recent days | Source: CryptoQuant

As shown in the above graph, the Bitcoin exchange inflow to Coinbase has recorded many sizeable spikes in the last couple of weeks. However, as is apparent, there were no significant price moves following any of these large deposits.

These spikes were not that big individually. So if the investors who made these transfers dumped their coins as soon as they completed the transactions, it would make sense that they couldn’t cause any volatility.

However, the quant notes that there could be another scenario here. What if the holders responsible for these inflows haven’t pulled the trigger on the selling yet? It’s not unusual for investors to deposit their coins to exchanges in advance, waiting for the right movements in the price to exit.

All these transfers amounted to around 20,000 BTC entering into Coinbase’s wallets. At the current exchange rate, this stack would be worth around $336 million, which is certainly large enough to cause volatility in the crypto’s price if sold all at once.

“Of course, if it were sold right after the deposit, the situation would be different, but you need to be careful if it hasn’t been sold yet,” cautions the analyst.

BTC Price

At the time of writing, Bitcoin is trading around $16,800, up 1% in the last week.

BTC seems to have seen a small increase in the last few days | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.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.

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