On-chain data shows that the Bitcoin exchange whale ratio rose just ahead of the crypto’s plunge below the $19,000 level.
Bitcoin Exchange Whale Ratio Surpassed 90% Just Before Price Drop
As one analyst pointed out in an article on CryptoQuant, whale activity on the exchanges has been raised recently.
The “Exchange Whale Ratio” is an indicator that measures the ratio of the top ten transactions entering exchanges to total exchange inflows.
The ten largest transfers are assumed to come from whales, so the metric tells us what portion of the total number of coins entering trade comes from these huge holders.
When the value of this indicator is high, it means that a large part of the input currently comes from whales. Such a trend may be a sign of dumping this cohort and therefore may be bearish for the price.
On the other hand, the low values of the ratio may suggest that whales currently constitute a significant portion of transactions to exchanges. This type of trend can be bullish or neutral for the value of the crypto.
Historically, the metric has generally had values above 0.85 during bear markets or false bulls, while it has generally remained below this threshold during bull runs.
Now, here is a graph that shows the trend of the Bitcoin exchange whale ratio over the past two months:
The value of the metric seems to have been elevated recently | Source: CryptoQuant
As you can see in the graph above, the Bitcoin exchange whales ratio jumped yesterday and reached a value of 0.9, implying that whales contributed 90% of trade entries.
This spike in the indicator came shortly before the coin’s price plunged below $19,000, suggesting that whale dumping may have been behind the decline.
The ratio has also remained high since then, which could mean that the cohort continues to deposit on exchanges, which could prove bearish for BTC.
At the time of writing, the price of Bitcoin is hovering around $19,300, down 4% in the past seven days. Over the past month, the crypto has lost 17% in value.
The chart below shows the price trend of the coin over the past five days.
Looks like the value of the crypto has rebounded back a little to above $19k again since the plunge yesterday | Source: BTCUSD on TradingView
Featured image from Karl-Heinz Müller on Unsplash.com, charts from TradingView.com, CryptoQuant.com