Bitcoin metric suggests where BTC price could trade next
Bitcoin flows from spot exchanges to derivative exchanges suggest a potential short term bullish flip for BTC price,
However, BTC remains in bear market owing to flows to spot exchanges.
CryptoQuant Senior Analyst Julio Moreno shared the outlook on Thursday.
Bitcoin remains in a bear market as price struggles to sustain an upward move since the breakdown to June lows. However, according to one on-chain metric, the flagship cryptocurrency’s price outlook for the short term suggests a bullish flip.
Nonetheless, the prevailing market sentiment might see a period of further accumulation.
BTC price outlook
The bullish perspective, shared by CryptoQuant senior analyst Julio Moreno via Twitter, is based on the inter-exchange flows of BTC.
The analyst says this metric has previously been a market cycle indicator, with prices going up when flows from Coinbase to derivative platforms increase and vice versa.
“Bitcoin flows from Coinbase to derivative exchanges are increasing again,” he tweeted on Thursday. “These kind of flows are associated with the market cycle – increasing flows from Coinbase to derivative exchanges, bull market [and] decreasing flows, bear markets.”
#Bitcoin Flows from Coinbase to derivative exchanges increasing again.
These kind of flows are associated with the market cycle.
– Increasing flows from Coinbase to derivative exchanges, bull market.
– Decreasing flows, bear markets. pic.twitter.com/1Ws2R1Ty0J
— Julio Moreno (@jjcmoreno) August 25, 2022
So while flows into spot exchanges remain high to suggest bears are still in charge, increasing transfers to derivatives means the chances of a bullish flip over the next few weeks are growing.
Bitcoin flows- what happens?
Bitcoin flows to derivative platforms jump in a bull run, helped by a risk-on sentiment that sees traders leverage their BTC on long positions. Investors also tap into the exuberance to bet on altcoins, using their Bitcoin sent to derivative exchanges as collateral.
The opposite occurs during bear markets, with jitters in a risk-off environment seeing flows to spot exchanges amid selling pressure.
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