Deposits from large investors are boosting exchange flows, increasing the average deposit size for BTC and ETH.
Bitcoin’s ongoing correction could worsen in the coming weeks due to an ongoing trend among traders and large investors. Analysts at crypto research firm CryptoQuant have discovered that BTC traders are sending large amounts of their holdings to exchanges.
Historically, large foreign exchange deposits have preceded sell-offs, while withdrawals from trading platforms signal that investors are self-entrusting their assets. In this situation of increasing BTC deposits, traders intend to continue selling the digital asset amid the current slowdown.
BTC will see more selling pressure
BTC fell to a seven-month low of just over $80,000 last week. Although the asset has returned to the $91,000 range at the time of writing, the bears remain in control and momentum is weak, according to the CQ report.
As the cryptocurrency fell as low as $87,000, the total number of units sent to exchanges reached a high of 9,000 BTC on November 21. Market experts have found that 45% of the total assets sent to trading platforms come from large deposits – investors depositing 100 BTC or more at a time. The average deposit value increased from 0.6 BTC last week to 1.23 BTC a few days ago, reaching the highest level in a year.
If Bitcoin traders and investors continue to deposit large amounts of BTC on exchanges, the cryptocurrency may have a harder time recovering from this decline. A new wave of strong demand will be necessary to absorb supply and restart an increase in the price of the asset.
ETH and Altcoins are also not safe
Besides BTC, Ether and other altcoins also enjoy significant exchange deposits. For ETH, total flows to trading platforms have not increased much, but deposits are increasingly dominated by large amounts. Since the second-largest crypto asset fell to $2,900, the daily average exchange deposit has increased to 41.7 ETH, a level not seen in almost three years.
Meanwhile, the total daily number of deposits in the altcoin sector has remained high. Since July, the number of transactions sending altcoins to exchanges has hovered at over 40,000. Transactions peaked at 78,000 on October 17. This high exchange deposit activity aligns with the weak price momentum seen in the altcoin sector during this cycle.
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