Bitcoin Exchange Inflows by Short-Term Holders Intensify Amidst Stalled Rally

Bitcoin exchange inflows by short-term holders recently intensified, signaling a possible end to the recent bullish market surge. On-chain data from Glassnode, an analytics firm specializing in blockchain metrics, reveals that this group of investors has deposited approximately 1.28% of their total Bitcoin supply onto centralized exchanges. This metric, known as “exchange inflow,” measures the amount of Bitcoin that investors are currently depositing on exchanges for selling-related purposes.

Bitcoin Exchange Inflows by Short-Term Holders Intensify Amidst Stalled Rally
Bitcoin Exchange Inflows by Short-Term Holders Intensify Amidst Stalled Rally. Image source: Glassnode

Short-term holders, as the name implies, are investors who hold their crypto assets for relatively short periods. However, for Glassnode, these are investors who have only held their coins for less than 155 days. 

They are often considered the fickle group in the market. They are easily swayed by fear, uncertainty, and doubt (FUD) or quick profit-taking opportunities. Therefore, when the exchange inflow from short-term holders is high, it is often seen as a potential sign of market dumping. They will tend to sell their holdings in response to negative market sentiment.

In the Bitcoin market, short-term holders represent one of the two major investor cohorts, alongside long-term holders. Short-term holders typically exhibit more volatility and are prone to reacting swiftly to market fluctuations. Graphs provided by Glassnode indicate that exchange inflows from short-term holders spiked during periods of market FUD earlier this month.

Despite the panic exhibited by short-term holders during these times, it is important to note that the scale of their selling was still relatively lower compared to previous selloffs witnessed over the past year. This suggests that while there may be some selling pressure from short-term holders, it has not reached the levels of significant market downturns observed previously.

MicroStrategy Expands Bitcoin Holdings

In other related news, MicroStrategy, a prominent business intelligence company, continues to increase its Bitcoin holdings. The company recently purchased an additional 12,333 bitcoins for approximately $347 million, bringing its total holdings to 152,333 BTC. 

Image source: MicroStrategy

At current market prices, MicroStrategy’s Bitcoin holdings are valued at around $4.6 billion. This strategic move was partially funded through the issuance of new stock.

MicroStrategy’s executive chairman, Michael Saylor, who stepped down as CEO in August 2022, has become well-known for his strong belief in Bitcoin as a store of value and hedge against inflation. The company embarked on its Bitcoin acquisition journey in August 2020. It is now steadily accumulating a substantial amount of Bitcoin since then.

BlackRock’s Chance of SEC Approval for Bitcoin ETF

Meanwhile, BlackRock, one of the world’s largest asset managers with approximately $9.5 trillion in assets under management, is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch a spot Bitcoin exchange-traded fund (ETF). If approved, the ETF would provide BlackRock’s clients with indirect exposure to Bitcoin. this will further bridge the gap between traditional finance and the cryptocurrency market.

Interestingly, Bloomberg’s senior ETF strategist, Eric Balchunas, believes that BlackRock has a 50% chance of receiving SEC approval for its Bitcoin ETF. This prediction is based on the premise that Grayscale, a major cryptocurrency asset management firm, is more likely to win its ongoing lawsuit against the SEC. 

Image source: Twitter

BlackRock’s track record with ETF applications is impressive, boasting a 575-1 approval rate, which adds to the potentially favorable outcome.

What’s Next for BTC?

As mentioned at the outset, BTC has recorded a slowdown in momentum as the benchmark cryptocurrency retreats from the $31,000 mark. Furthermore, at the time of making this report, BTC traded around $30,000, reaching its lowest point in close to a week. 

Bitcoin’s ability to hold itself above the $30,000 mark over the coming days should naturally dictate where the price goes next. An inability to stay above this threshold should fast-track a return to the $28,000s. Meanwhile, persistence above the mark should open the door to a renewal of the 2023 peak at $31,420 and a rapid continuation to $32,000.

BTC/USD daily chart from TradingView

BTC Statistics Data

Current Price of BTC: $30,110

BTC Market Cap: $583.8B

Circulating Supply: 19.4M

BTC Total Supply: 21M

BTC Market Ranking: #1

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