The exchange ratio of whales drops sharply

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On-chain data shows that the Bitcoin exchange whales ratio has fallen sharply recently, a sign that could prove bullish for the price of the crypto.

Bitcoin 7-Day MA Exchange Whale Ratio has fallen rapidly recently

As one analyst pointed out in an article on CryptoQuant, the metric also saw a similar decline at the end of 2018.

The “exchange whale ratio” is an indicator that measures the ratio of the sum of the top ten transactions going to exchanges to the total exchange inflows.

The ten largest transfers to stock exchanges are believed to come from whales. Thus, this ratio tells us what share of the total foreign exchange inflows is contributed by these huge holders at the moment.

When the value of this metric is high, it means that the majority of entries are currently made up of whales. Since one of the main reasons investors deposit on exchanges is for the purpose of selling, such values ​​could be a sign that whales are dumping large amounts and therefore could be bearish for the price of the crypto.

On the other hand, the indicator having low values ​​suggests that the whales are healthier contributors to the inflows, and therefore could be neutral or bullish for the value of BTC.

Now, here is a graph that shows the trend of the 7-day moving average Bitcoin exchange whale ratio over the past few years:

It seems that the 70-day MA value of the metric has fallen sharply in recent weeks | Source: CryptoQuant

As you can see in the chart above, the Bitcoin Exchange Whale Ratio had a pretty high value just a few months ago.

However, since then the indicator has observed a rapid downward trend and the ratio has now reached quite moderate values.

This means that the whales have recently reduced their inflow volumes, suggesting that selling pressure from them may be wearing thin.

The quant also highlighted the whale exchange ratio trend over the previous Bitcoin cycle in the chart. This looks like a similar downtrend to the one seen at the end of 2018 when the bottom of this bear market formed.

The analyst notes that while it is impossible to say whether the current sharp drop in the whale ratio means that the bottom is also reached for this cycle, it is likely that at least volatility will now start to calm down.

BTC price

As of this writing, the price of Bitcoin is hovering around $16.8,000, down 1% in the past week.

BTC fell over the past day | Source: BTCUSD on TradingView Featured image by Thomas Lipke on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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