Bitcoin’s price has been on a downward spiral, dropping significantly from its record high of $109,000 in March. Currently trading below $82,000, the cryptocurrency has experienced a 24.6% decline, causing concern among investors and analysts.
One troubling development that has been highlighted by CryptoQuant contributor EgyHash is the increase in sell-side activity on Binance, one of the largest cryptocurrency exchanges in the world. EgyHash points out that key metrics on Binance are showing a rise in coin inflows, indicating that investors are depositing larger amounts of coins on the exchange, potentially to sell them. Additionally, the “Bitcoin: Exchange Inflow (Top10)” metric has reached levels not seen in almost a year, suggesting that significant amounts of Bitcoin are being moved onto Binance for selling purposes. Furthermore, Binance’s Bitcoin reserves are also on the rise, returning to levels last seen in November of the previous year, which could lead to more selling pressure on the market.
The Taker Buy/Sell Ratio further reinforces this bearish sentiment, showing that sell orders currently outweigh buy orders. With rising inflows, increasing exchange reserves, and a dominant bearish sentiment, it is likely that Bitcoin’s price could continue to decline in the near future.
In addition to sell pressure on exchanges, other indicators are providing a broader view of the market sentiment. CryptoQuant analyst tugbachain recently discussed the Net Unrealized Profit/Loss (NUPL) metric, which assesses whether investors are holding Bitcoin at a profit or a loss on average. The NUPL is currently below the 0.50 support level, historically signaling bearish phases. However, a recovery above this threshold could indicate renewed buying interest and potentially lead to a more positive price action. If Bitcoin’s monthly close for February surpasses the 0.50 mark, it could attract long-term holders back into the market.
Overall, the combination of increasing sell pressure on exchanges, bearish indicators, and the NUPL metric below the 0.50 support level suggests that Bitcoin’s downward trajectory may persist. Investors should closely monitor these key metrics and market trends to make informed decisions in this volatile environment.