Bitcoin Long-Term Holders Cut Exchange Inflows, Reducing Selling Pressure

• Exchange inflow spikes above 4% have consistently preceded price drops, influencing Bitcoin’s market movement.
• Price movements in Bitcoin mirror exchange inflows very closely, shaping investor sentiment in 2024 and early 2025.
• Bitcoin price changes closely reflect exchange inflows, influencing investor mood in 2024 and the first part of 2025.

Long-term Bitcoin investors have significantly decreased exchange inflows, causing the monthly moving average to drop from 3.8% to 1.4%.  In keeping with past market trends and investor attitude, this decrease in selling pressure lessened downward pressure on the price of Bitcoin.

Declining Inflows and Market Behavior

Analyst Axel Adler Jr. reported that long-term holders have decreased their Bitcoin exchange inflows. Historically, higher inflows from these holders have preceded price corrections. The current 1.4% inflow level marks a sharp drop from the previous 3.8%.

Following the market changes between 2018 and 2020, Bitcoin traded below $10,000, with inflow spikes aligning with price declines. Early 2020 saw a surge in inflows, pushing exchange inflow percentages past 4%. In subsequent years, inflows fluctuated, rising during market corrections and falling as Bitcoin’s price recovered.

Historical Patterns and Market Reactions

From 2020 to 2021, Bitcoin rallied to over $60,000 before correcting. In the rally, exchange inflows were largely below 2%, except for mid-2021 when Bitcoin dropped from all-time highs. All major price drops for 2022 were followed by increasing inflows, going above 2% as long-term investors moved money into exchanges.

By 2023, Bitcoin remained over $30,000, with fewer exchange inflows than in past bear markets. An ephemeral inflow peak in mid-2023 coincided with price retracements. Regardless, aggregate selling pressure from long-term holders remained restricted to contribute to Bitcoin’s market upturn.

Current Market Trends and Key Levels

Entering 2024 and early 2025, Bitcoin exceeded $60,000, seeing increased activity from long-term holders. The latest inflow spike pushed exchange inflows beyond 4%, marking the highest level since 2020. The 30-day moving average remained elevated, reflecting stronger market participation.

The 1.4% inflow threshold has consistently played a role in Bitcoin’s price movements. Inflows above this level have often accompanied price corrections. Recent data from Axel indicates a decline in inflows, reducing immediate selling pressure. Market trends continue to show a strong correlation between exchange inflows and Bitcoin’s price movements.