Going deeper
As we argued in the previous post, movements in this period are uninteresting and mostly influenced by the spread of positive and negative news.
Now let's try to go deeper.
If we analyze the weekly net flows of small investors (assets under 1 BTC), we will find that they are continuing to buy. It is retails volumes that are driving the bullish Bitcoin markets. When small investors stop buying, we have a warning sign about the possible start of a bearish market.
This is not the case.
In fact, in the last 30 days, whales have sold 4,000 BTC, while retails have bought 31,000 BTC.
Binance is by far the most widely used exchange for small investors and in Q2 2021 saw a huge influx of BTC.
Deposits on the Exchanges are not a good sign as they indicate an increase in liquid supply which in turn causes sell pressure to increase.
Well, since a few days the net balance is negative, which means that there are more withdrawals than deposits.
It is true that the difficulty of binance with international regulators may have contributed to this dynamic, but such an event cannot be ignored. Reasonably, it indicates to us that much of the supply is moving from "liquid" to "illiquid."
The last time we saw such a phenomenon was between October and November 2020. We all remember what happened next.
Looking forward to next week
The weekend normally sees a drop in trading and an increase in volatility.
As said, the movements of this period are strongly influenced by the news that, real or not, sometimes provide the cue to liquidate or buy by big market makers that, to move, need great liquidity.
In order, on July 18 will occur the release of 16,000 Btc by GBTC, an event that according to some could increase liquidity in the market and volatility to the downside (news that feed the Fud). Vice versa the news of the "B Word" conference could be used as a bullish signal from July 21.
Our view on the future of the market remains unchanged, it is too early to determine if this is the right time for the restart of the bullish cycle but the phase is good to evaluate the accumulation, especially of altcoins.
DISCLAIMER
We are not giving any financial advice regarding cryptocurrencies, but rather giving applicable advice for new, intermediate and experienced people who are currently into cryptocurrencies or someone who is just now realizing what it is. Before you read this I must say that this blog will be based on the assumption that you have already done some research on cryptocurrencies and the Blockchain ecosystem. We will continue to provide explanations and details to the best of our ability, however we encourage you to do your OWN research because only YOU will know how this second financial revolution will best fit into your life. Thank you for reading our contents.