Exchange Inflow Surge: Are Bitcoin Whales Taking Profits?

Bitcoin whales appear to be realizing their profits from BTC’s latest rally, as on-chain analysts have identified a surge in inflows to centralized crypto exchanges.

According to a CryptoQuant Quicktake by anonymous crypto analyst Phi Deltalytics, BTC whale inflows to exchanges currently constitute a substantial portion of overall flows to trading platforms.

Whales May Be Taking Profits

A separate Quicktake from analyst Woominkyu on April 25 revealed that the unrealized profits of long-term bitcoin whales had gotten high, especially with BTC hovering above $60,000. Analyzing the chart in his post, Woominkyu explained that whales were seeing an increase in their profits, but they had not cashed out yet.

The analyst identified a spot on the chart that indicated a significant rise in their unrealized profits, suggesting that this cohort of BTC investors was holding onto their positions. However, he warned that a move to realize the profits would impact the market.

Around 24 hours after Woominkyu’s post, Phi Deltalytics announced the notable surge in bitcoin exchange inflow, the majority of which appears to be from whales.

“This uptick potentially signifies significant profit-taking by whales amidst the 2024 Bitcoin bull run. While acknowledging that such metrics occasionally generate false signals, prudent caution is warranted in interpreting market dynamics,” Phi Deltalytics said.

Long-term Holders Are Cashing Out

Besides bitcoin whales, long-term holders of the digital asset have also been cashing out. Three days ago, Woominkyu observed that the Spent Output Profit Ratio (SOPR) of long-term holders had surged past that of short-term holders over a seven-day moving average. This indicates that the former cohort is realizing more profits than short-term holders.

Additionally, Woominkyu explained that the SOPR of long-term holders has decreased over the years. However, there are occasions where the ratio experiences an uptick, which precedes spikes in bitcoin’s price. Those upticks have revealed that long-term investors are capitalizing on price surges to realize price. Investors are urged to exercise caution against potential price corrections and increased volatility as the SOPR is currently high.

Meanwhile, BTC is consolidating between $60,000 and $70,000, meaning the cryptocurrency could witness a major slump if it rallies to $70,000 and gets rejected there. At the time of writing, the asset was changing hands at $64,100, registering insignificant gains or losses in the past 24 hours.