Bitcoin exchange whale ratio is increasing, what does it mean?

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On-chain data shows that the Bitcoin exchange whale ratio has recently increased. Here’s what that may mean for the price of cryptocurrency.

Bitcoin Exchange Whale Ratio (72-Hour MA) Surpasses 85%

As one analyst pointed out in an article on CryptoQuant, the BTC whale ratio is rising right now. The “exchange whale ratio” here is an indicator that measures the ratio of the sum of the top 10 Bitcoin transfers to exchanges to the total exchange inflows.

Here, the top 10 trades to exchanges are assumed to come from whales, which means that the value of the indicator tells us how much of the total exchange inflows are currently contributed by these huge holders.

When the whale ratio has a high value, it means that a large percentage of the exchange deposits are currently made by whales. As one of the primary reasons investors use exchanges is for selling purposes, this type of pattern may suggest that whales are exerting strong selling pressure in the market and therefore may be bearish for the value of the asset.

On the other hand, low values ​​imply that whale influx activity is not too large relative to the rest of the market, which is a trend that could be neutral or bullish for BTC.

Now, here is a chart that shows the trend of the 72-hour moving average (MA) of the Bitcoin exchange whale ratio over the past few months:

The value of the metric seems to have jumped in recent days | Source: CryptoQuant

As shown in the chart above, the MA Bitcoin 72-Hour Exchange Whale Ratio has recently reached a high. This suggests that the whales are very active in terms of inbound exchange contributions at this time.

In the past, the metric breaking above the 0.85 mark for long periods of time has generally proven to be bearish for the price of the crypto. At this value, 85% of the inputs come from whaling entities.

With the most recent surge of the indicator, its value has once again entered the region above the 0.85 level, which could mean that the whales are preparing for another big sell-off.

However, for a bearish scenario to become likely, the Bitcoin whale ratio would need to remain at these elevated levels for at least several days. Earlier in the month, just before the start of the rally, the indicator entered this zone, but since the peak did not last too long, the price of the coin did not feel a bearish impact.

The chart also shows that the trough that formed shortly after the collapse of crypto exchange FTX was accompanied by quite low values ​​in the indicator, implying that the low whale selling pressure has could help it take shape.

BTC price

As of this writing, Bitcoin is trading around $22,900, up 11% in the past week.

Looks like the value of crypto hasn’t moved much in recent days | Source: BTCUSD on TradingView

Featured image by Thomas Lipke from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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