Quant Explains How Gemini Netflow Can Predict Bitcoin Tops

Keshav Verma

3 years ago

3 mins read

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Quant explains how there may be a correlation between the Gemini Bitcoin netflow and BTC price tops, based on pattern of the last few years.

Can Gemini Netflow Predict Bitcoin’s Price Tops?

As posted by an analyst on CryptoQuant, the historical chart for the Gemini netflow (30-day MA) vs the price reveals there could be a correlation between the indicator and BTC tops.

The Bitcoin netflow here refers to the net number of coins exiting or entering the crypto exchange Gemini. The indicator’s value is simply calculated by taking the difference between the inflows and the outflows.

When the netflow takes negative values, it means more BTC is moving out of the exchange than in. During such periods, investors are withdrawing their coins to personal wallets, either for hodling or for selling through OTC deals.

Similarly, positive values imply that investors are moving their Bitcoin to exchanges for altcoin purchasing or withdrawing to fiat.

The below chart shows the trend for the Gemini BTC netflow over the past few years after applying a 30-day moving average (MA):

The correlation between the BTC price and the Gemini netflow | Source: CryptoQuant

The above chart highlights certain time periods in the history of Bitcoin versus the trend of the indicator then. Here is a breakdown:

The first period is 2017. The indicator showed a local top and started declining 5 days before the then price ATH was achieved.

Next is 2019, where a similar trend seems to have been followed. Here, the BTC price peak wasn’t made until 23 days after the Gemini netflow started declining.

Then there is 2020, which had two instances where the pattern followed. And finally, the indicator was also able to correctly predict the 2021 ATH as well as the top of the latest rally.

The chart reveals all these peaks were attained after an average of 20 days from the netflow local top, with the latest high taking the longest (26 days).

Going by these cases, there does seem to be a correlation between the Gemini netflow declining after forming a peak and the Bitcoin price top.

BTC Price

At the time of writing, Bitcoin’s price floats around $46.7k, down 0.1% in the last 7 days. Over the past month, the indicator has gained 1.3% in value.

Here is a chart showing the trend in the price of the coin over the last three months:

BTC's price shows high volatility | Source: BTCUSD on TradingView

Over the last few days, Bitcoin’s value has shown a lot of volatility, and at the moment, it seems to be going back up. Some indicators suggest that BTC’s next move up could very well be the last for this run.

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.