Bitcoin, ether, and altcoin deposits to exchanges have surged, a pattern that has historically signaled periods of higher volatility across the crypto market, according to CryptoQuant.
Bitcoin (BTC) deposits to exchanges climbed to nearly 49,000 BTC on June 30, "a rare extreme" seen only four other times this year when daily deposits approached 50,000 BTC, Julio Moreno, head of research at CryptoQuant, said in a report. He said previous spikes of that size were followed by sharp increases in price volatility and directional moves.
"At these inflow levels, the market is absorbing a large volume of bitcoin being repositioned to exchanges, a pattern that has historically preceded significant directional moves," Moreno wrote.
The recent increase in bitcoin deposits is being driven primarily by large holders rather than retail investors, Moreno noted. He said the average bitcoin deposit to exchanges doubled from about 1 BTC to 2 BTC, indicating whales and institutional investors are moving larger amounts of bitcoin onto exchanges.
Historically, spikes in average deposit size have been a more bearish signal than high deposit volumes alone because they reflect "deliberate repositioning" by larger market participants, Moreno said, noting that such moves have been a reliable leading indicator of downward price pressure.
