Key Insights:
- Whale activity drops below 0.4, showing reduced institutional selling pressure.
- Bitcoin exchange reserves fall to 2.53M BTC, signaling cold storage movement.
- Sharp spike in outflows suggests retail accumulation is gaining momentum.
Bitcoin has soared above $93,000, and on-chain data from Binance and other exchanges suggests a short squeeze is in the works. The current market behaviour, such as reduced whale activity, exchange reserves decline, and momentum signals on technical charts, indicates that the market dynamics might be changing.
Whale Activity Declines as Retail Buying Strengthens
After April 15, the Exchange Whale Ratio, which measures the ratio of large transactions to total exchange volume, fell below 0.4. This implies that whales, the large institutional players, are stepping back from selling. A distribution zone where whales were likely offloading holdings was around 0.65, which was the ratio’s peak during March 24–April 2nd.
From this point on, the ratio declined steadily, showing that retail investors were becoming the main players in the market. As Bitcoin’s price moved up from $83,000 on April 15 to over $93,000 on April 23, this transition was accompanied by less selling from large holders.
Also, the whale ratio decline was accompanied by a lower selling pressure across all exchanges, which created a setup where price could rise with little resistance.
Bitcoin Exchange Reserves Hit Multi-Month Lows
Adding to the bullish case, total Bitcoin held on exchanges (exchange reserves) decreased from 2.57 million BTC to 2.53 million BTC during the same period. This trend started towards the end of March and lasted until April 23. The decrease in reserves indicates that investors are moving Bitcoin from exchanges to cold storage, which is generally a sign that they do not intend to sell in the near future.
As CryptoQuant notes, this period marks the start of a ‘cold storage trend’ – a term that is often used when coins are leaving exchanges to be stored offline in a more secure manner.
Exchange Flows Indicate Accumulation
During late March and early April, exchange inflows (Bitcoin sent to exchanges) were high, averaging over 40,000 BTC daily. This is typical behavior in a “Capitulation Zone”, where the sellers move their assets to exchanges in order to sell. Inflows peaked at around 60,000 BTC on April 7.
However, inflows dropped to around 20,000 BTC by April 15 and remained low, indicating less holders were looking to sell. U.S. Tax Day also fell on April 15, and that could have been a reason for the earlier inflow spike as investors liquidated assets to pay for their tax obligations.
At the same time, outflows (Bitcoin taken out of exchanges) started to rise sharply. On April 22, outflows reached 60,000 BTC. On CryptoQuant charts, this is labeled as an “Accumulation Shift”, meaning that buyers are taking their Bitcoin off exchanges after buying, a behaviour that is typically linked to long-term holding.
It means low inflows and high outflows, which is a flow pattern that indicates growing investor confidence and less sell-side supply.
Technical Momentum Signals Bitcoin Price Upside
Additionally, the weekly momentum indicator SOTT on Titan of Crypto’s chart is also flashing green. In the current cycle, this indicator has flipped twice before, once in late 2023 and once again in mid-2024. After the first flip, Bitcoin rose by 172.97%. After the second, it gained 92%.
Just when BTC was hitting $93,000, the most recent flip occurred. The start of strong upward moves has come after previous green flips in the SOTT. The shift of the indicator is often used as a signal of the market building bullish momentum.
The pattern is in line with the current on-chain activity and implies that the market conditions could support further upward price action.Source | XThe pattern is in line with the current on-chain activity and implies that the market conditions could support further upward price action.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
