Bitcoin Price Sinks below US$40,000, Inflows of BTCs to Centralized Crypto Exchanges Increase Significantly: Why Analysts Cheer?
Bitcoin price has plunged below the US$40,000 level, prompting bearish speculations about the cryptocurrency market as a whole. In fact, the price plunge below the US$39,000 level resulted in a surge in the inflows of Bitcoin (BTC) to centralized exchanges.
Lex Moskovoski, CIO at Moskovoski Capital, has said while sharing data that in one hour on May 18, 2021, 22,917 BTCs were transferred to the centralized exchanges. He was quick to point out that this is the largest ever hourly inflow of bitcoin in the centralized exchanges since the “Black Thursday” crash of March 2020.
Lex Moskovski (@mskvsk) tweeted:
“22,917 #Bitcoin in a single hour were deposited to exchanges yesterday. This hourly inflow is rivaled only by the March 2020 crash. People are scared.”
The inflow of crypto coins to the centralized platforms is inferred as a signal for selling them. On the other hand, the outflow of Bitcoins from crypto exchanges to cold storage or DeFi protocols is considered as an indication of being moved to either cold storage for security purposes or DeFi protocols for yield generation.
Glassnode’s on-chain chart shows that around 35,000 Bitcoin worth more than US$1.4 billion were deposited on the Binance crypto exchange in the last 48 hours. Twitter analyst William Clemente III shared this data with his more than 70,000 followers. This triggered bearish price predictions on social media.
Analysts say Time Has come to be Cheerful
Though the BTC price against the US Dollar (BTC/USD) has reached lows below US$40,000 psychological level, some analysts have found reasons to be bullish.
Lark Davis, a popular cryptocurrency analyst, said that this downturn has pushed the 14-day relative-strength indicator (RSI) to the oversold territory for the first time since March 2020. This shows that the ongoing Bitcoin price crash is reaching its plateau.
Many others believe that this correction was a welcome relief because it will trigger a bullish recovery. They believe that this will help BTC make a swift return to upward momentum once the momentum of BTC selling has been exhausted.
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