Bitcoin (BTC) saw a significant influx of activity on exchanges on July 27, indicating the possibility of heightened volatility ahead.
On-chain analytics firm Glassnode reported that intraday BTC exchange inflows reached multi-month highs, sparking concerns among traders about potential price swings.
BTC’s price has been struggling to break above $30,000, with many traders cautioning against further downside risks.
The uncertainty in the market has left Bitcoin’s largest-volume investor cohort, the whales, in a state of uncertainty as well.
The recent movement of large amounts of coins has drawn attention to the entities sending funds to exchanges, raising the possibility of increased selling pressure.
One market observer, James Straten from CryptoSlate, pointed out that over 10,000 BTC flowing into exchanges in a single day represented the most significant one-day increase in months.
He compared it to the situation during the SVB collapse in March, which caused widespread market uncertainty.
Trader Ali, in agreement with Straten’s observation, warned of a potential spike in volatility.
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Data from research firm Santiment also showed that a substantial number of idle BTC changed hands over the past 24 hours, coinciding with a 10,000 BTC increase in supply on crypto exchanges.
While the combined BTC balance on the monitored exchanges went back above 2.25 million, it is crucial to note that overall balances remain at multi-year lows.
The last time balances were at this level was in March 2018.
Straten highlighted the impact of the cost basis of different hodler cohorts on BTC’s price.
Both short-term and long-term holders’ cost bases have been closely monitored by Glassnode and others as significant support levels. Long-term holders, for instance, have reduced their cost basis to $20,490, the lowest since April 2022.
The realized price is only $70 below this level. In previous bear markets in 2015 and 2019, the short-term holder realized price acted as support, and in 2023, it has been tested three times, currently at $28,241.
In conclusion, the surge in BTC exchange inflows on July 27 has raised concerns about potential volatility in the cryptocurrency’s price.
Market observers and traders are closely monitoring the movement of coins on exchanges, as well as the cost basis of different hodler cohorts, as potential indicators of future price movements.
The situation remains uncertain, and market participants are bracing for possible fluctuations in the coming days.
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