Bitcoin has dropped to $27,500 today as on-chain data shows Kraken’s cryptocurrency exchange has received its largest deposit since 2018.
A Large Amount Of Bitcoin Has Entered Kraken In The Past Day
An analyst in a CryptoQuant Quicktake post explained that the Kraken platform has observed a historic inflow of 14,924 BTC during the past day or so. The indicator of interest here is the “exchange inflow,” which keeps track of the total amount of Bitcoin entering into the wallets of any given centralized exchange.
When the value of this metric spikes, it means that the exchange in question is receiving deposits of a large amount right now. Generally, one of the main reasons why holders may move their coins from their self-custodial wallets to these platforms is for selling-related purposes.
As such, high inflows indicate that selling occurs in the market. Naturally, such a trend can have bearish effects on the cryptocurrency’s value if there isn’t an equal amount of outflows also occurring to counteract the selling. Now, here is a chart that shows the trend in the Bitcoin exchange inflow for Kraken over the past couple of years:
Looks like the value of the metric has shot up during the last few days | Source: CryptoQuant
As is visible from the graph, the Bitcoin exchange inflow for Kraken has surged to extremely high levels in the past day. With this inflow, around 14,924 BTC (worth around $410.9 million at the current exchange rate) has flowed into the platform’s wallets.
This is quite a significant amount, and it is the largest inflow spike of the cryptocurrency that the exchange has seen since 2018, around five years ago.
In the chart, the quant has also attached the data for another metric, the “exchange reserve.” This indicator keeps track of the total number of coins in any exchange’s wallets.
From the graph, it’s apparent that the Bitcoin exchange reserve of Kraken had observed a steep drop back in June. Interestingly, right after this drawdown in the metric, the BTC price had seen a sharp rally. These net withdrawals on the platform may have been moves that helped fuel the surge.
With this inflow spike, though, the reserve has shown the exact opposite move: it has shot up and recovered near to the levels it was at before the aforementioned plummet.
This rise in the Kraken BTC exchange reserve would confirm that there haven’t been withdrawals on a scale that would cancel out these extreme inflows.
It’s unclear whether these inflows have been made for dumping. Still, given that the asset’s price has registered some decline since they occurred, it would seem possible that these transfers to the exchange had occurred to take advantage of the profit-taking opportunity that the latest rally had offered.
Bitcoin had hit a peak above $28,500 yesterday, but it would appear that the profit-taking has driven its price down towards the $27,500 level.
BTC has retraced some its recovery in the past day | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com