Bitcoin rally stalls as short-term holder exchange inflows increase.

On-chain data shows that the influx of Bitcoin exchanges from short-term holders has recently intensified, coinciding with the halt of the asset’s rally.

Bitcoin Short-Term Holders Are Showing Elevated Exchange Inflows

According to data from the on-chain analytics firm Glassnode, short-term holders have recently deposited an amount equivalent to 1.28% of their total supply. The term “exchange inflow” refers to the total amount of Bitcoin that investors are currently depositing into centralized exchanges.

Typically, investors deposit Bitcoin to these platforms for selling purposes. Therefore, when this metric is high, it may indicate a market trend of selling or dumping. Naturally, this trend can have bearish consequences for the price of the cryptocurrency.

Although the exchange inflow is usually defined for the entire market, this discussion specifically focuses on the inflows made by short-term holders (STHs).

STHs constitute one of the two major cohorts in the Bitcoin market, the other being “long-term holders.” STHs include all investors who have been holding their coins for less than 155 days.

As their name implies, these investors do not tend to hold Bitcoin for extended periods. They are known to be more fickle and are likely to sell at the sight of any fear, uncertainty, or doubt (FUD) or profit-taking opportunities.

The following chart displays the trend in Bitcoin exchange inflows specifically for STHs over the past year or so.

The value of the metric seems to have been quite high in recent days | Source: Glassnode on Twitter

In this chart, the exchange inflow of STHs is represented as a percentage of their supply, which refers to the sum of the wallet amounts held by each individual STH. The graph indicates that the value of this indicator had reached notable levels earlier in the month, coinciding with FUD events such as the SEC lawsuits against cryptocurrency exchanges Binance and Coinbase.

Although the STHs were clearly panicking at that time, the scale of their selling was still significantly lower than previous sell-offs that occurred over the past year.

However, after the recent rally that pushed the cryptocurrency’s price above $30,000, the value of this indicator has sharply increased. Currently, the metric stands at 1.28%, which means that STHs have recently deposited an amount equivalent to 1.28% of their supply.

This level is higher than what was observed during the rebound rally in March of this year. As shown in the graph, the rally back then slowed down when STHs increased their selling.

Currently, Bitcoin has been trading sideways since the recent surge in price. It is possible that the intensified selling by STHs is contributing to this trend, similar to what happened in March.

BTC Price

As of now, Bitcoin is trading around $30,100, with a 4% increase in the past week.

BTC continues to hold above the $30,000 mark | Source: BTCUSD on TradingView