Unfoldings of the BitMEX case do not indicate massive sales, although BTC/USD approaches $11,500, show CryptoQuant data.
A potential Bitcoin (BTC) settlement followed by a price drop „should not happen,“ according to the CEO of a well-known analysis tool.
In a tweet on October 12, Ki Young Ju, CEO of CryptoQuant, noted that the flow of entries to the exchanges remains low despite BTC’s price gains.
BitMEX Operator Hires Director of Compliance Amid Criminal Charges in U.S.
Ki: Flows of exchanges „continue in the safe zone
Ki highlighted CryptoQuant’s average exchange rate inflow metric, which remains comfortably within the low risk area, suggesting a low chance of liquidation.
The average exchange inflow measures how much Bitcoin is entering the exchanges, taking into account that the currency is used for sales or trading activities. By extension, it gives an idea of the activity of the whales – high-volume hodlers planning to dispose of the BTC.
Bitcoins from BitMEX can be marked as „high risk“ in Brazil
„The $BTC dumping will not happen,“ Ki commented.
„The average entry of all exchanges usually indicates how many whales are active in the exchanges. Above 2 BTC is the danger zone, and we are still in the safe zone. ”
- Therefore, the rise in the BTC/USD pair to close to $11,500 this week has not increased the temptation for investors to sell.
- Bitcoin mean inflows vs. BTC/USD 1-month chart
- Average Bitcoin flows vs. 1-month BTC / USD chart. Source: Ki Young Ju/ Twitter
The lack of activity contrasts strongly with the beginning of this year. On March 9, a week before the coronavirus caused a drop in the price of crossed assets, the exchanges entries passed the „danger zone“ of 2 BTC. Days later, around March 14, the entries reached a peak of almost 5 BTC. Bitcoin subsequently dropped to $3,600.
Sales pressure at BitMEX?
CryptoQuant also previously highlighted the miner flows that contribute to the Bitcoin price action. Last month, it was an increase in flows from mining pools, also presumably destined for sale, that followed a 3% drop in BTC/USD.
In October, the outlook for withdrawals was affected by BitMEX, as the derivatives giant is currently under investigation by US tax authorities. BitMEX outflows totaled 50,000 BTC on October 2 alone, the CryptoQuant data show.
BitMEX inflows and outflows chart
The numbers of BitMEX, Cointelegraph and Digital Assets Data confirm that it does not hold as much market share for Bitcoin futures as it did in the past.
Bitcoin futures volume exchange comparison 1-month chart
1 month chart for comparing the volume of Bitcoin futures. Source: Cointelegraph/ Digital Assets Data
BitMEX actions can scare away big institutions, says former CBOE trader
As several analysts have noted, Bitcoin therefore largely weathered the storm caused by the platform problems, beating resistance levels by $11,000.
This resilience encouraged Bitcoin’s bullish case, as published by the Cointelegraph, with an increasing number of market participants confident of further gains preceding further losses.