Written by Hazel J. Greene, Senior Analyst

The Bitcoin market has recently witnessed a concerning trend as on-chain data reveals a surge in the Bitcoin exchange whale ratio. This indicator points to a potentially bearish outlook for BTC, signaling the presence of significant selling pressure from whales. In this blog post, we will delve into the concept of exchange whale ratio and its impact on the market, while analyzing recent trends and their implications for Bitcoin’s price.

The exchange whale ratio is a crucial metric that measures the ratio between the top 10 Bitcoin transactions going to exchanges and the overall exchange inflows. Since major transaction volumes typically originate from whales, this ratio provides insights into how these transfers compare with the total deposits made by the wider market.

An elevated exchange whale ratio indicates that whales constitute a substantial proportion of the total market deposits. Given that investors often transfer funds to exchanges for selling purposes, a high ratio suggests that whales are actively involved in significant selling. Consequently, this trend can impact Bitcoin’s price negatively.

Conversely, low values of the exchange whale ratio imply a healthier balance, indicating that whales are contributing a relatively smaller portion to the overall inflow. In such cases, these influential investors exert less selling pressure, potentially paving the way for a bullish boost in Bitcoin’s price.

The 72-hour moving average (MA) Bitcoin exchange whale ratio offers valuable insights into the current market dynamics. Two crucial levels for this ratio: 0.85 and 0.90. Historically, during bullish periods, the ratio has remained below 0.85, indicating stronger buying pressure. Conversely, bearish periods or false rallies have witnessed the ratio surge above 0.85, highlighting the intensified selling pressure from whales.

The 72-hour MA Bitcoin exchange whale ratio has experienced a recent increase, breaching the 0.85 level and even momentarily crossing the 0.90 threshold. This indicates that whales were potentially engaged in an extraordinary degree of selling. Although the metric has slightly cooled down, it remains in close proximity to the 0.90 mark. Such prolonged elevated selling pressure from whales can be considered bearish for Bitcoin’s price as it hinders upward movement.

The Bitcoin exchange whale ratio provides valuable insights into the market dynamics, particularly regarding the involvement of whales in selling activities. The recent surge in this ratio, reaching levels above 0.85 and briefly exceeding 0.90, suggests significant selling pressure from whales. Investors and traders should closely monitor this metric, as it holds the potential to guide decisions amidst Bitcoin’s price fluctuations. As of now, Bitcoin is trading around $30,300, experiencing a slight 1% decline over the past week.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.