Bitcoin price faces the risk of “major volatility” with the influx of 10,000 BTC hitting exchanges.

The cryptocurrency market is buzzing with anticipation as a significant event unfolds in the Bitcoin (BTC) space. On July 27, a staggering 10,000 BTC made its way back onto cryptocurrency exchanges, raising concerns among traders about potential “major volatility” ahead.

According to data from Glassnode, a reputable on-chain analytics firm, the one-day exchange inflow of Bitcoin has reached multi-month highs. This sharp increase in BTC flowing back to exchanges has caught the attention of market observers and analysts, who are closely monitoring the situation for signs of price movement.

Bitcoin’s price action has been lingering below the critical $30,000 mark, and traders have been cautioning about the possibility of further downside. The market sentiment appears to be uncertain, especially among the largest-volume investors in the cryptocurrency, known as the whales.

As the large tranches of coins continue to move in recent days, the focus has shifted to the entities responsible for sending funds to exchanges. This development has raised speculation that selling pressure could intensify, potentially leading to a spike in market volatility.

James Straten, a research and data analyst at CryptoSlate, highlighted the significance of this event by comparing it to the collapse of Silicon Valley Bank (SVB) in March. The SVB collapse had a profound impact on the market, causing widespread uncertainty. Now, with the substantial BTC inflows to exchanges, traders are bracing themselves for a possible surge in volatility.

Popular trader Ali echoed this sentiment, noting that a considerable number of idle BTC has changed hands over the past 24 hours, coinciding with the 10,000 BTC increase in supply on crypto exchanges. This combination of factors has led to heightened speculation and caution among market participants.

Despite the recent influx of BTC to exchanges, the overall balances remain at multi-year lows. Glassnode’s data shows that the combined BTC balance on the monitored exchanges surpassed the 2.25-million mark, a level not seen since March 2018.

In addition to exchange inflows, analysts are closely monitoring the cost basis of Bitcoin hodlers. The cost basis of both short-term and long-term holders continues to be a crucial support level for Bitcoin’s price. Straten pointed out that long-term holders have reduced their cost basis to $20,490, the lowest since April 2022. This indicates that these holders are confident about the asset’s potential for growth.

The market’s current dynamics draw comparisons to previous bear markets, with the short-term holder realized price acting as a key support level during such times. As the BTC price hovers around $28,241, traders are looking for clues from historical patterns to gauge potential price movements.

As the situation unfolds, it’s essential to exercise caution and conduct thorough research before making any investment or trading decisions. The cryptocurrency market is known for its inherent volatility, and every move involves risk.

Disclaimer: This article does not provide investment advice or recommendations. Readers are urged to conduct their own research and due diligence before making financial decisions.

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