CryptoQuant from analysts Julio Moreno From Coinbase to derivatives exchanges bitcoin Expressing that their flows have started to increase again, he said that this is a positive indicator.
The analyst reminded that such flows give important signals for the market cycle. Accordingly, from Coinbase to derivative exchanges BTC Flows are bullish, while flows from derivatives exchanges to Coinbase signal a bear market.
When we examine the chart shared by the analyst, we notice that the market falls during periods when the entry to derivative exchanges from Coinbase decreases and reverses.
Although the increase in the inflows to derivatives exchanges is a positive data for the upcoming period, when we look at the previous movements, we see that this flow should continue for a while and the price of Bitcoin is moving sideways at this time.
The analyst summarizes the relationship between Coinbase and derivatives exchanges with the following statements.
“The direction of bitcoin flows is an indicator of the market cycle. The market is in a bull run when Bitcoin flows from Coinbase to derivatives exchanges. When the flows reverse and bitcoin starts to exit the derivatives exchanges and enter Coinbase, it can be interpreted as a sign that the market has gone into a bearish and bearish trend.
Why is there such a relationship?
During a bull run, markets buy risk. In this context, bitcoin traders send their bitcoins to derivatives exchanges to trade bitcoins with leverage or to use their bitcoins as collateral for trading with other cryptocurrencies.
During a bear market, investors go into a “risk aversion” state. Therefore, bitcoin traders send their money from derivatives exchanges to spot exchanges to sell them and convert them into real fiat money.”
*Not Investment Advice.
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