Bitcoin Under Pressure as Deposits Surge on Exchanges: Insights from CryptoQuant
Recent analysis from CryptoQuant indicates that increasing deposits from large investors are likely to exacerbate Bitcoin's ongoing correction.
The ongoing correction in Bitcoin’s price may worsen in the upcoming weeks due to a trend observed among traders and significant investors. Analysts from CryptoQuant have noted that BTC traders are transferring substantial portions of their assets to exchanges.
Historically, large deposits to exchanges have often preceded significant sell-offs, while withdrawals indicate that investors are shifting assets into self-custody. Given the rise in BTC deposits, it appears that traders plan to continue selling amidst the current downturn.
BTC to See More Selling Pressure
BTC recently fell to a seven-month low of just over $80,000 last week. Although by the time of writing it has somewhat rebounded to the $91,000 range, bearish sentiment prevails, and momentum remains weak according to the report from CryptoQuant.
As Bitcoin’s price edges towards $87,000, the total amount sent to exchanges increased to 9,000 BTC on November 21. Notably, 45% of these deposits are from large investors, each contributing 100 BTC or more. Average deposit values have jumped from 0.6 BTC last week to 1.23 BTC recently, marking a one-year high.
If this trend of depositing BTC continues among traders and investors, the cryptocurrency may struggle to recover from its downward trajectory. A new wave of demand will be essential to absorb the selling pressure and trigger a price rally for the asset.
ETH and Altcoins Also Affected
In addition to Bitcoin, Ethereum and other altcoins are also witnessing a surge in deposits to exchanges. While overall deposits for ETH have not surged dramatically, significant sums are increasingly making up these deposits. After ETH fell to $2,900, the daily average of deposits has risen to 41.7 ETH—this is a level we haven’t seen in nearly three years.
Furthermore, daily deposit numbers across the altcoin sector remain elevated. Since July, altcoin transactions to exchanges have consistently exceeded 40,000, peaking at 78,000 on October 17. This increased deposit activity aligns with the evident price decline in the altcoin sector during this cycle.
