[Bitcoin Now] 'Coin Move' from Wallet to Exchange... Price Drop Signal?

Number of Bitcoins Deposited to Exchanges
Surges 11 Times Compared to Early Last Month

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Amid fears of inflation and concerns over the U.S. Federal Reserve's giant step (a 0.75 percentage point interest rate hike), the cryptocurrency market has taken a direct hit, with the amount of Bitcoin transferred from personal cryptocurrency wallets to exchanges increasing significantly compared to before. The more Bitcoin deposited into exchanges, the higher the likelihood of selling, which could lead to further price declines.

According to cryptocurrency data firm CryptoQuant on the 15th, the number of Bitcoins deposited into exchanges the previous day, when the price hit an 18-month low, was recorded at 212,195. This is 11.08 times higher compared to the 19,152 Bitcoins deposited in early last month before the Bitcoin price plummeted due to the Luna Classic incident. Compared to 63,704 at the beginning of this month, it increased 3.33 times. Even on the 13th, when the price dropped more than 8%, 180,431 Bitcoins were transferred from personal wallets to exchanges, more than before.

An increase in deposits from personal wallets to exchanges means that the quantity available for trading increases accordingly. As a result, the supply of Bitcoins available for trading rises, increasing the likelihood of selling and potentially leading to further price declines. According to the global cryptocurrency market tracking site CoinMarketCap, as of 9:30 AM that day, the price of Bitcoin was $22,036 (approximately 28.44 million KRW), down 2.39% from the previous day. After the Luna Classic incident, on the 9th, the number of Bitcoins deposited into exchanges was 212,320, which is 3.44 times higher than the previous day. At that time, the Bitcoin price dropped by about $4,000 in one day. Since then, more than 100,000 Bitcoins have been transferred to exchanges daily, and the price has shown a bearish trend.

Ethereum, which recently experienced a sharp price drop due to a bank run, is also seeing increased deposits to exchanges. On the 13th, when the price fell by more than $200, 708,573 Ethereum were transferred to exchanges, 3.65 times more than the previous day. The next day, 619,958 Ethereum were deposited into exchanges, and the Ethereum price recorded the $1,200 range, down more than 36% compared to early this month.

Meanwhile, according to cryptocurrency data provider Alternative, the Fear & Greed Index, which indicates investment sentiment toward cryptocurrencies, fell by 1 point from the previous day to 7 points (extreme fear) on that day. Alternative’s Fear & Greed Index means that the closer the score is to 0, the more pessimistic and fearful investors are, while a score near 100 indicates optimism.