Recent analysis from CryptoQuant indicates a significant drop in altcoin inflows to exchanges, potentially signaling the beginning of an accumulation phase in the market.
Overview of Inflow Decline
According to CryptoQuant analyst Axel Adler Jr., the monthly inflow of altcoins to exchanges stands at $1.6 billion, down 36% from the $2.5 billion annual average. This decline indicates that altcoin holders prefer to keep their assets off exchanges, thereby reducing sell pressure.
Historical Precedents
Historical data shows that similar low inflows to exchanges often precede significant altcoin rallies. For example, the decline in inflows during August-September 2024 and late 2023 was followed by substantial price increases for altcoins.
Prospective Scenarios
Adler Jr. noted that when inflows slip below $1.6 billion, market participants sometimes shift from short-term trading to long-term holding. There is a possibility that funds may first flow into Bitcoin before returning to altcoins with renewed strength. It's important to monitor trading volumes as potential signals for market entry.
The decline in altcoin inflows positions the market for accumulation, which could lead to sharp price movements if demand increases. However, it's essential to consider the influence of geopolitical factors and regulatory news on the market.
