Bitcoin whales exit market as exchange inflows hit 3-month high

The number of bitcoin whales is rapidly dwindling to levels not seen since earlier this year, possibly as inflows to centralized exchanges (CEXs) hit three-month highs.

The Bitcoin market tracking agency Glassnode has released several bearish indicators on Bitcoin. The data shows that whales holding at least 1,000 Bitcoins have withdrawn from the market, and more than 1.7 million Bitcoins have flowed into exchanges, the most since February this year.

Increased bitcoin inflows to CEXs suggest that whales may be exiting the market by selling bitcoin, which could be a way to prepare for a longer market downtrend. Cointelegraph reported on May 7 that the latest sell-off may have been executed by short-term holders who accumulated bitcoin in late January and early February, when the bitcoin price hit a six-month low of around $34,800.

A gloomy market outlook based on hard data has caused the Bitcoin Fear and Greed Index to drop to 11, which is in the "extreme fear" zone. The index rates how fearful or greedy Bitcoin investors are.

Despite the bad mood, BTC’s daily transaction count doesn’t appear to be negatively impacted yet. According to on-chain data from YCharts, the number of daily transactions on May 8 was 233,892 worth about $30 billion, which is about the same as the average since January.

Glassnode’s chief on-chain analyst “Checkmate” tweeted on Sunday: “A lot of people are waiting for Bitcoin’s ‘surrender shadow’,” partially confirming investors’ expectations that Bitcoin will continue to fall. The "surrender shadow" is usually characterized by relatively long, sudden and catastrophic price drops, such as March 12, 2020, when Bitcoin fell by 43% in one day, falling to around $4600.

Market analyst Caleb Franzen told his 11,000 followers on Twitter on Sunday that investors should think the market will continue to trend lower based on his analysis, which suggests we remain "short-term bearish." He concluded by saying, "It seems worth expecting more pain."

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