Three Indicators Point To A Strong Sell-Off That Spells Trouble For BTC

Three indicators point to a strong sell-off for Bitcoin which could spell trouble for the benchmark cryptocurrency as the bulls brace for impact. The on-chain indicators warn about potential sell-offs as we can see in our latest Bitcoin news below.

CryptoQuant, the South-Korea-based blockchain analysis company outlined that the latest readings they have show large BTC outflows from miners’ wallets and other over-the-counter BTC purchases by institutional investors, while a third metric shows that there were stablecoin deposits across all crypto exchanges. The three indicators point to a strong bearish bias on the BTC market. The BTC miner position index reached an eight-year-high on Tuesday and underscored that more BTC producers started moving their rewards to other wallets and seeing the rate of the BTC/USD pair reach $42,000.

BTC miners hold some of the strongest BTC supply portions before dispatching them to the retail markets per demand. Once the limit BTC supplies against the higher demand, it usually pushes the cryptocurrency higher. Also, increasing the supply against the demand will only lower down the BTC/USD exchange rate. With the demand for BTC dropping in the short—term, we can see the two other indicators that CryptoQuant was talking about. Ju commented on Coinbase Premium which is a crypto cold storage service that is offered by the exchange and eventually ended up lowering the BTC deposits:

“We might see green candles in BTC chart, but those wouldn’t come from institutional investors, it’s from crypto native firms. Coinbase Premium looks not enough to break key resistance levels. Without USD spot inflows, no more bull-run.”

Next, the all exchange reserves’ metric reached an all-time high and this points to an increase in the total amount of trades from BTC to other tokens like USDC, USDT, and BUSD. The traders use stablecoins with a 1:1 dollar peg to make profits or losses without having to go through the mainstream process via bank. The data analytics platform Glassnode outlined the capital traffic and said that it could have originated at the end of Institutional Investors which could give BTC support against aggressive downside attempts below $30K:

 “This is substantial, given that BTC crossed $30k just this year. It suggests investors are injecting capital, and therefore confidence in further price appreciation.”