Bitcoin is trading at around $49k at the time of writing and with a nearly 2% drop in its price in the past 24 hours, the asset continues to remain rangebound. Given the increased inflow of Bitcoin and stablecoins to exchanges, the rangebound price action may set the foundation for further investment inflow into the asset. The outflow of Bitcoin across exchanges has continued dropping, after an initial spike in the outflow from Coinbase, which can be considered to be a sign of institutional buying.
Bitcoins exchange outflow has continued dropping based on the above chart from CryptoQuant. Since outflow from exchanges is dropping, the narrative of scarcity that was driving price up has slowed down and may lead to rangebound price action, just as it did in February and during December 2020. On-chain metrics suggest that the sentiment is bearish, however, the price is holding up well above $45000, and that may partially be because institutions have bought above this price range and they support buying.
Danny Scott, CEO of CoinCorner tweeted on Bitcoins downtrend and large price swings, on Twitter.
#Bitcoin leaving exchanges continues its downward trend for 13 months straight.
This is the 1st time we're seeing this trend.
We can expect large price swings in the coming months.
— Danny Scott (@CoinCornerDanny) March 6, 2021
The inflow to exchanges has dropped as well, however, the drop in outflow is more significant. However this is ideal for an increased institutional inflow since the last time there was a significant Bitcoin outflow from Coinbase, there was a likelihood of buying ...
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