On-chain data shows that Bitcoin exchange whale ratios have been high recently, which could be detrimental for the cryptocurrency’s price.
Bitcoin exchange whale ratio is about to enter ‘very high risk’ territory
As one analyst in CryptoQuant explained postalthe 72-hour EMA whale ratio is close to 0.90, a very high risk zone.
this”swap whale ratio” is a metric defined as the sum of inflows to the top ten exchanges divided by the total inflows.
In simple terms, this metric tells us what portion of the total inflow was contributed by the top 10 trades, which usually belong to whales.
When the value of this indicator is above 0.85, it means that whales currently account for a large percentage of foreign exchange inflows.
As investors typically move their bitcoins to exchanges for sales, this trend could indicate that whales are dumping at this moment.
During BTC bear markets or fake bull markets with massive sell-offs, the value of this indicator typically stays above this threshold.
Related reading | Bitcoin volume plummets from recent highs
On the other hand, values below 0.85 generally indicate that whale inflows are currently in a healthier balance with the rest of the market. During bull markets, the value of this ratio typically remains in this area.
Now, here is a chart showing the trend of the Bitcoin exchange whale ratio (72-hour MA) over the past few months:
It looks like the indicator has been at a high value recently | Source: CryptoQuant
As you can see in the graph above, the Bitcoin exchange whale ratio is currently at around 0.89, which is above the 0.85 threshold.
Based on the quantitative analysis in the post, values above 0.90 may be considered a “very high risk” area. Therefore, the current value of this indicator is very close to this value.
So far this month, the ratio has remained almost consistently above the 0.85 line, with several peaks above the 0.90 level.
The analyst believes that whales are active now due to the minutes of the Fed’s May meeting, and if the ratio remains high in the near future, it could spell trouble for Bitcoin.
As of this writing, price of bitcoin Floating around $28.8k, down 2% over the past 7 days. The cryptocurrency lost 30% of its value in the past 30 days.
The chart below shows the trend of the coin’s price over the past five days.
Seems like the price of the coin has plunged down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com