The Bitcoin Fund Flow Ratio for all exchanges is decreasing while BTC transactions are increasing. This could indicate that a bull market is imminent.
Bitcoin Fund Flow Ratio for all exchanges goes down
As mentioned in a CryptoQuant post, the BTC fund flow ratio appears to be on a downward trend for all exchanges. BTC transactions are also increasing.
The Bitcoin Fund Flow Ratio is an indicator that is defined as the total amount of BTC entering or leaving exchanges divided by the total amount of BTC transferred across the network.
Fund flow ratio = total stock exchange inflows + outflows in BTC ÷ total transferred BTC (entire network)
Basically, the indicator shows the percentage of BTC involved in exchange-related transactions compared to total transactions across the network.
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With the help of the fund flow ratio, it becomes possible to know what percentage of BTC transactions take place outside of stock exchanges. That is, through methods such as over-the-counter (OTC) deals or P2P transfers.
The other relevant metric here is the total number of tokens transferred. As the name suggests, this indicator shows the total number of BTC that have been transmitted in any form on the network.
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Now here is a graph that shows the trend of both the BTC fund flow ratio and the total number of tokens transferred:
The two Bitcoin indicators show bullish signals | Source: CryptoQuant
As the graph shows, the BTC fund flow appears to be decreasing while the metric of tokens transferred increases.
This means that the exchanges that are receiving fewer transactions usually signal low volatility, but overall transactions are also increasing across the board. This would suggest that OTC trades are skyrocketing (and thus taking a relatively higher percentage) rather than decreasing volatility itself.
The combination of these indicators that behave in this way is usually a bullish sign. In August last year, before the bull run began, there were similar signals.
At the time of writing, the price of BTC is around $ 42.7,000, up 9.5% over the last 7 days. Over the past month, crypto has appreciated 23.5% in value.
Below is a graph showing the trend in crypto price over the past 3 months:
BTC's price shoots up | Source: BTCUSD on TradingView
Bitcoin appears to have made a sharp upward trend as the cryptocurrency approaches $ 43,000. It is unclear whether BTC can continue the rally and go past this point or whether it will crash again as it did at the beginning of the month. If the indicators discussed above are true, a bull run is more likely at the moment.