Bitcoin on-chain data suggests accumulation is going on as investors feel FOMO about the current rally above $57k.
Bitcoin Accumulation Goes On As Investors Feel FOMO
As explained by a CryptoQuant post, on-chain data is showing signs of accumulation as BTC netflows show negative spikes, and the stablecoins inflows indicate big moves.
The Bitcoin netflow indicator shows the net number of coins entering or exiting wallets of all exchanges. Negative values of the metric mean a larger amount of BTC is moving out of exchanges than the amount moving in.
On the other hand, positive values imply a net inward movement of BTC to the exchanges. If such values are sustained, it means investors are bearish on the coin and hence dumping it.
While if negative value sustain for long, it implies investors are feeling a buying pressure and are bullish on the cryptocurrency.
Now, here is a chart showing the current trend in the Bitcoin netflows:
BTC observes negative netflows recently | Source CryptoQuant
As you can see in the above graph, the indicator has shown some negative spikes recently. Just yesterday, more than 7000 BTC exited exchanges.
The other relevant metric is the all exchanges stablecoins inflow, which shows the total number of these fiat-tied coins entering into exchanges.
The below chart shows the trend for this indicator:
Stablecoins inflow spikes up | Source: CryptoQuant
Looks like the latest trend has been that large volumes of stablecoins have been moving into exchange wallets. All the money in these coins was kept aside by investors as they were waiting for an opportunity to arise in a volatile market like Bitcoin.
Since BTC is rallying up now, investors think this could be their chance and FOMO is driving them to move these assets into the coin. Such large values of stablecoin inflows can be bullish not only for BTC, but also for altcoins.
Both the Bitcoin netflows and the stablecoin inflows hint that there is big accumulation going on right now. Investors showing this behavior can help keep the rally from losing steam.
However, Google trends suggest that all this accumulation seems to be old money moving back into BTC rather than new investors coming in. Fresh money is going to be crucial if the crypto aims to make a new ATH.
At the time of writing, Bitcoin’s price floats around $56.8k, up 13% in the last seven days. Over the last thirty days, the crypto has gained 23% in value.
Here is a chart showing the trend in the price of BTC over the last five days:
Bitcoin breaks $57k in a strong move up | Source: BTCUSD on TradingView