Why bitcoin price likely to drop further

Spread the love

Bitcoin’s latest price drop was not sudden, particularly because there were signs on the charts. In reality, there were many metrics that pointed at a price drop after the price had passed $50,000 metrics, including on-chain research, fear and greed index, volatility, and network momentum.

Miner’s operation, considered the most important to Bitcoin’s market behaviour, also signalling a price decline, with the same hint of a further drop in Bitcoin’s price soon. Bitcoin miners are the largest sellers in almost every business cycle, so there is a consistent selling of Bitcoin to miners. Bitcoins from mining pools and individual mining wallets hit spot exchanges, creating liquidity in almost every market cycle. In addition, this crucial role in the Bitcoin business cycle makes the on-chain activity of miners suitable for signal deriving.

Miner flows to exchanges hint at further drop in Bitcoin

Flow from Miners to spot exchanges || Source: Coinmetrics

The proportion of tagged miner outflows in the attached CoinMetrics map illustrates shifts in miner outflows through spots and derivative exchanges in the past. Just before a drop in Bitcoin’s price, miner’s inflows to spot exchanges reach a peak or local maximum.

It reached a high of 37,000 in the most recent event. Soon enough, the crypto asset plummeted to the $47,000 level of exchange. However, if Bitcoin’s netflows on exchanges rose more, it might signal a further decrease in prices. Bitcoin MPI, perceived to be another important metric, was 1.94 at press time, down from 3.5 on 21 February.

Miner flows to exchanges hint at further drop in Bitcoin

Bitcoin’s MPI || Source: CryptoQuant

When Miner’s position index or MPI is greater than 2, there is high selling pressure since miners are selling. Since the value of the MPI was 1.94 at press time, closer to 2, it can be concluded that the miners are still selling, despite the fact that the pressure on sales has decreased.

Finally, it is perhaps alarming that the largest inflows from miners hit Binance and Huobi, among other major exchanges. In fact, bitcoin inflows to Binance are still on the charts.

Miner flows to exchanges hint at further drop in Bitcoin

Bitcoin inflow to Binance || Source: CryptoQuant

Since bitcoin inflows to Binance are climbing the drop to $47,000-level, there is a further possibility of a price correction. When the inflows to Binance finally fall, they signal a short-term fall in sales pressure and price stability.

 604 Interactions,  2 today

READ ALSO:
Bitcoin Price Movement Analysis for 11th April, 2021

Is Bitcoin nearing its peak? It's unlikely. Many on-chain measurements revealed that, although Bitcoin was highly bullish, it had not Read more

Fidelity’s Tom Jessop on why Crypto has reached a “tipping point.”

The crypto market has gained traction as a result of low interest rates and fiscal stimulus, according to a Fidelity Read more

How arrests for attempting to obtain a hitman and a nuclear bomb demonstrate that the dark web is not always anonymous.

Paying with cryptocurrency does not guarantee your safety. Most of the criticisms levelled at cryptocurrencies is that its difficult-to-trace existence Read more

Bitcoin, BTT, Dogecoin Price Movement Analysis for 7th April, 2021

Bitcoin was expected to remain above the $55,800-support, a level that coincided with its 200-SMA. BitTorrent Token was projected to Read more

Why crypto analyst Ben Armstrong says, ‘He Very Confident Bitcoin Will Reach $300K This Year.’

Recently, blockchain expert and influencer Ben Armstrong mentioned Bitcoin in a video posted to his highly popular YouTube channel “BitBoy Read more

Binance Coin, Dogecoin, SushiSwap Price Movement Analysis for 4th April, 2021

Binance Coin predicted that fresher record thresholds will be set in the coming days due to solid technicals. Following a Read more

Tron Price Movement Analysis for 4th April, 2021

In the cryptocurrency industry, excessive uncertainty has had a long-term effect on the price of the digital commodity. This uncertainty Read more

Ethereum Price Movement Analysis for 4th April, 2021

Ethereum, the second-largest cryptocurrency, has entered a volatile zone, which could drive the digital asset's price even higher. In the Read more

Chainlink, DigiByte, Enjin Coin Price Movement Analysis for 4th April, 2021

Bitcoin faced some selling pressure just above the $59k mark, leading it to slip to $56,600. The majority of the Read more

Bitcoin fell by more than 4%, causing many other cryptocurrencies to plummet drastically.

The world's most expensive cryptocurrency fell 4.1 percent, bringing several other coins down with it, sending the economy into the Read more

Leave a Reply

Contact Us