Bitcoin Bearish Signal: Exchange Whale Ratio Spikes

On-chain data shows that the Bitcoin exchange whale ratio has been at very high values during the past few days, a sign that may be bearish for BTC.

Bitcoin Exchange Whale Ratio Has Been At Elevated Levels Recently

As pointed out by an analyst in a CryptoQuant post, whales have been applying a high amount of selling pressure in recent days. The indicator of relevance here is the “exchange whale ratio,” which measures the ratio between the sum of the top 10 Bitcoin transactions going to exchanges, and the total exchange inflow.

The 10 largest transactions going to exchanges are generally coming from the whales, so the exchange whale ratio can tell us about how these transfers currently compare with the deposits being made by the entire market (the total exchange inflow).

When the value of this metric is high, it means that the whales are making up a large part of the total deposits right now. As one of the main reasons why investors transfer to these platforms is for selling purposes, this kind of trend can suggest that whales are participating in a high degree of selling right now.

On the other hand, low values of the ratio imply the whales are only contributing a relatively healthy portion to the inflows at the moment. Since these humongous investors aren’t applying significant selling pressure in this case, Bitcoin could benefit from a bullish boost to its price.

Now, here is a chart that shows the trend in the 72-hour moving average (MA) Bitcoin exchange whale ratio over the last few months:

In the above graph, the quant has marked two important levels for the 72-hour MA Bitcoin exchange whale ratio: 0.85 and 0.90. At these marks, the whales are responsible for 85% and 90% of the total exchange inflows, respectively, in the BTC market.

Historically, during bullish trends, the indicator has remained below the 0.85 mark. While in bearish periods or false bull rallies, the metric has generally surged above 0.85, indicating elevated selling pressure from these humongous holders.

As highlighted in the chart, the 72-hour MA Bitcoin exchange whale ratio has registered an increase recently and has crossed inside the territory above the 0.85 level.

In this surge, the metric even briefly crossed above the 0.90 level, which implies that the whales were potentially participating in an extraordinary degree of selling then.

Since then, the indicator has since cooled down a bit, but it’s still very much near the 0.90 level. Naturally, this current elevated selling pressure could be bearish for the asset’s price.

If a move upward has to happen, the metric would need to plunge below the 0.85 level, like it did last month, and paved the way for the rally above the $30,000 level (as the graph displays).

“This metric is one to watch, it might just provide the clues we need to navigate the market’s murky waters,” notes the analyst. “Keep an eye on the whales—they may just tip the scales!”

BTC Price

At the time of writing, Bitcoin is trading around $30,300. down 1% in the last week.