Exchange deposits increased again significantly – dip in sight

Net inflows into Bitcoin exchanges rose significantly on Sunday. While “extreme fear” dominates the market, more and more BTC are stored on illiquid “Hodl” addresses. How does that work together? The market update.

After Bitcoin has almost shown itself to be a stablecoin against its will in the last few weeks, the crab on the BTC course could soon come to an end. The BTC deposits on spot exchanges recorded on 18. July a clear peak, which indicates an increased willingness to sell. Reason to panic? Spoiler: No.

Bitcoin deposits increased massively – buying opportunity in sight?

The on-chain data platform Cryptoquant registered a net inflow of over 28,700 BTC on Sunday for wallet addresses that could be assigned to crypto exchanges. This is the highest level since the end of February, when the Bitcoin price hit the USD 57,000 mark. This was followed by a short but severe slump to $ 45,200. Therefore, it cannot be ruled out that the Bitcoin price will have another dip in the house.

BTC is increasingly being parked on exchanges again. Source: Cryptoquant

But would a sale be worthwhile for the majority of investors at the moment? Data from the blockchain analysis company Chainalysis at least indicate that the vast majority of BTC units are currently clearly in the black. Over ten million BTC could currently be sold with a profit of over 100 percent.

Unrealized profit and loss of all Bitcoin units. Source: Chainalysis

While the net inflows and unrealized gains suggest selling sentiment, these two metrics alone are not enough to call the bear market out. There is an overwhelming (and growing) number of all previously “mined” BTC on wallets that are considered to be illiquid – in other words: The number of coins being hoed is constantly increasing. Over 15 million BTC are stored on wallets that Chainalysis categorizes as “illiquid”. Liquid addresses are those wallets that send more than two thirds of the BTC received. In the case of illiquid wallets, however, this value must be less than a quarter.

Liquidity of the Bitcoin units held

Also what the average “age” of the coins means – the period in which a Bitcoin unit was kept on a wallet, the signs tend to be “hodl”.

“Extreme fear” despite the growing Hodl mentality

The number of short-term (0-2 weeks) held BTC has decreased by over 40 percent in the past 90 days. Meanwhile, there was growth in the “middle-aged” (2 – 52 weeks) coins, while the number of long-term Bitcoin (over a year) held almost stagnated at -0.7 percent in the same period of the previous year.

Percentage change in the holding time of Bitcoin. Source: Chainalysis

In view of the growing number of institutional players in the market, small investors should therefore not be fooled. However, the sentiment analysis suggests that this is exactly what is currently happening.

Crypto Fear and Greed Index. Source:

The “Crypto Fear and Creed Index”Has been on“ Extreme Fear ”since the clear course correction in May.

Crypto Fear and Greed Index. Source:

The last time “extreme fear” dominated the mood in the market was after the Corona crash in March 2020. At least there, Warren Buffet’s famous stock market bonmots “Be fearful when others are greedy and greedy when others Having fear ”proved to be a valid investment strategy in retrospect.

Disclaimer: The assessments presented on this page do not constitute buy or sell recommendations. They are only an assessment of the author. DYOR remains the top priority.