The history of the Bitcoin Netflow Indicator may suggest that the current market is ready for the next big price swing as Crypto builds a new ATH.
Bitcoin Netflow has historically reached close to zero before major price increases
As explained by an analyst in the CryptoQuant post, there seems to be a relationship between BTC netflow and price uptrend.
The Bitcoin Netflow Indicator is defined as the difference between flow and outflow and it shows the net amount of crypto entering or leaving a centralized exchange.
When the metric adopts a negative value, it means that more investors are picking up their coins than depositors. This kind of sustainable trend can be bullish for BTC as holders usually take their crypto of exchanges for huddling or selling through OTC deals.
On the other hand, when more coins flow than the currency flowing on the exchange, Netflo shows a positive value, which can be bearish because it indicates that investors are sending their bitcoin to the exchange to withdraw or buy altcoins.
Now, here is a chart that shows the price trend of last year’s index:
The relation between BTC price and the netflows | Source: CryptoQuant
In the graph above, the analyst identified the behavior of the indicator by comparing it to the price of Bitcoin. Clearly, Netflow always touches the zero mark just before a big price goes up.
A netflow value of zero means investors take their coins out of the exchange balanced by those who put them in.
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This trend seems to have been followed during the bull race at the beginning of the year, and so far the current assembly has followed suit.
At the moment, the netflow is exactly zero, which makes the current point suitable for another big move. And it looks like it’s already started …
BTC price makes new all-time high!
Bitcoin has reached a new ATH today as crypto trades at $ 66k at the time of writing. The chart below shows the price trend of BTC in the last 24 hours.
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BTC breaks past $65k to make a new ATH | Source: BTCUSD on TradingView
Bitcoin is now heading towards unknown territory because now with each step a new ATH has to arrive. Knowledge of bull running in the past indicates that volatility will probably increase now and crypto prices will experience further changes. And if the netflores seem to be doing something, BTC looks ready to explode from this point.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com