Skepticism Surrounds Bitcoin Gains Amid Increased Exchange Inflows

by Giorgi Kostiuk

2 years ago

September Bears and Market Sentiment
Exchange Inflows and Selling Activity
Buyer Activity and Market Sentiment

Despite recent gains in the value of Bitcoin (BTC), market sentiment remains skeptical. This is due to a surge in exchange inflows, hinting at profit-taking.

September Bears and Market Sentiment

Historically, September has been a challenging month for Bitcoin, often resulting in poor performance. This history is causing market jitters, despite the recent upswing. The general sentiment in the market remains bearish. The Bitcoin Fear and Greed Index stands at 33, indicating traders are preparing for a potential repeat of previous September price dips. A recent report by U.S. fund manager NYDIG suggested the market could be in a seasonal slump for the next month. The report also noted that Bitcoin has typically fallen by 5.9% in September.

Exchange Inflows and Selling Activity

Data from CryptoQuant shows a significant increase in Bitcoin inflows to spot exchanges on 9th September. This surge coincides with a recovery in BTC prices, suggesting profit-taking and anticipation of a bearish trend. The Spent Output Profit Ratio (SOPR) ratio on CryptoQuant has shifted above 1, indicating that traders are selling to realize gains. This could potentially halt Bitcoin’s gains.

Buyer Activity and Market Sentiment

In a typical crypto bear market, buying activity remains relatively low. This trend is currently evident on the Bitcoin daily chart. The Chaikin Money Flow has been negative since late August, indicating more selling than buying. Additionally, BTC has traded below the 200-day Exponential Moving Average for two weeks, suggesting a negative general market sentiment.

Crypto traders are also focusing on the upcoming US Consumer Price Index (CPI) data. Positive inflation data could strengthen the case for the Federal Reserve easing interest rates, which could boost appetite for risk assets such as crypto. Despite the bearish signals, a positive sign emerged when spot Bitcoin exchange-traded funds (ETFs) flipped positive for the first time since late August. If the Bitcoin ETF data remains positive for the rest of the week, it could renew optimism among crypto traders and alleviate fears of a bear market.

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