Recently, a friend asked whether depositing 6,200 $BTC in the last 24 hours would cause pressure. Since I hadn't heard about this data, I went to check. First, from the exchange's inventory perspective, in the last 24 hours, only about 1,000 more Bitcoins were transferred in, not the exaggerated 6,000.
Recent weekly exchange inventory data
Secondly, when I looked at the exchange position data, I found a lot of interesting information. From the net position data, the three major price increases in the past year corresponded to a large amount of BTC being withdrawn from the exchanges. During a phase of bearish market, many investors preparing to exit often transfer BTC into exchanges, and purchasing power tends to decline significantly.
Recent yearly exchange net position data
However, now, although the price has decreased, the positions leaving the exchanges are at their highest in nearly a year. This indicates that when prices drop, a large number of investors are still buying BTC, rather than panic selling in large quantities. This is a typical strong accumulation signal, meaning long-term holders are using the dip to continue increasing their positions.
I know many friends will ask, why is the price still falling with such strong buying power?
There are generally two reasons:
Heavy selling pressure in a short time, with buying power unable to keep up with the selling pressure.
A lot of passive orders being filled, with fewer active purchases.
Overall, negative information leading to investor exits tends to have strong consistency, and there isn't enough buying power in the short term to support the price, resulting in a decline. Some investors are only placing "passive" orders, which can only slow down the rate of decline but cannot push the price up.
Typically, price increases require active buying. Unfortunately, there is indeed relatively little active buying right now, which is why the price continues to fall, but the number of investors buying is increasing. This decline is a turnover, and once the turnover ends, active orders should appear. This also means it is a signal for market stabilization or even reversal.
This article is sponsored by #Bitget ｜ @Bitget_zh
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