The on-chain analysis shows that the crypto exchange Gemini saw huge Bitcoin inflows just before the plunge to USD 38,000.
Huge bitcoin inflows to Gemini
As highlighted in a CryptoQuant post, the Gemini crypto exchange saw huge inflows earlier today, resulting in a positive increase in net flows.
Before exploring the data, here are some brief definitions for the relevant terms. Exchange inflow is the amount of BTC sent to the exchange platform from personal wallets.
Similarly, the outflow is the BTC that has been transferred from exchanges to personal wallets. The net inflow is just the difference between the value of the inflow and the outflow.
When the value of the net current is positive, it means that more BTC is entering the exchange than it is exiting. Such an increase would mean that investors want to sell their bitcoins and thus there is pressure to sell in the market.
On the other hand, when this indicator is negative, it means buying pressure in the market as more BTC is leaving the exchanges than it is in.
This is what the Bitcoin netflow diagram looks like for the Gemini crypto exchange:
The Gemini BTC netflow notices a huge positive spike | Source: CryptoQuant
As the graph above shows, Gemini has just seen a spike in Bitcoin netflow. Interestingly, immediately after these inflows, the price of BTC fell from just under $ 40,000 to $ 38,000.
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The graph also shows that the other large positive net flows appear to have been followed by a decline in crypto price. This makes it seem like there is a correlation between the net flows of Gemini and the price of BTC.
At the time of writing, Bitcoin price is hovering around $ k, up% over the past 7 days. The cryptocurrency gains for the month are around%.
Here is a chart that shows the trend in BTC price over the past 24 hours:
BTC witnesses a sharp fall from about $40k to $38k | Source: TradingView
After being in the range for quite a while, Bitcoin finally saw significant price movement when its price hit $ 40,000. The cryptocurrency has looked up for 9 days, something the coin has not seen in 6 years.
However, today it seems like BTC has finally gone down a bit, so today won’t be a positive day. As discussed earlier, that $ 38,000 slump is likely due to Gemini’s inflows.
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There have been similar instances in the past where Gemini inflows have resulted in sharp downtrends. However, they do not necessarily mean that a drop is occurring. It could still be worthwhile to keep an eye on the netflow of the crypto exchange for possible clues.