Recent months have seen a sustained period of negative Bitcoin netflows, an unprecedented trend in past cycles. This, coupled with a drop in short-term holder selling pressure, suggests a potential for Bitcoin's recovery. While historical price action following halvings usually involves a January drawdown, the current inflows and outflows data point towards a more stable and potentially bullish trajectory.
Comparing the flows of recent months to past cycles, such a sustained period of negative netflows hasn’t been seen previously.has struggled over the past two months, but this is not out of the ordinary. The psychological $100k-level was not an easy nut to crack. And, even when it looked like the bulls finally flipped it to support, the sellers found a way to send the price tumbling., BTC’s drawdown in January the year following the halving has usually been the norm.
Apart from historical price action data, the flow of BTC into and out of centralized exchanges also offers valuable insight into the behavior of market participants. Short-term holders exhibited arecently, but their selling pressure is set to wane. This could aid the chances of a BTC’s recovery on the charts.The 30-day moving average of Bitcoin inflows to exchanges has been dramatically sliding since hitting a local high in early December.
In June, BTC was trading near the $60k local lows amid its descending channel formation. In October, it broke this channel, but was still restrained by the $70k resistance. The drop in inflows while BTC consolidated below $100k was, therefore, a strongly bullish sight.The netflows, which was the difference between inflows and outflows, has also been trending south. The 30 DMA here too has been mostly negative since March 2024, with a brief period of positive flows in the second week of May.
Comparing the flows of recent months to the past cycles, such a sustained period of negative netflows was not seen previously. In 2020, the netflows were negative from late August to the final week of November. However, the past eleven months’ flow eclipsed the previous run’s three-month outflows by a significant margin.
BITCOIN NETFLOWS EXCHANGE TRENDS MARKET BEHAVIOR PRICE PREDICTIONS
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