Bitcoin daily exchange net flows have been erratic for the last month, to say the least. This is due to the numerous swings between dumping and stacking being done by investors in the space, all of which have affected the price of the digital asset in their own way. However, the net flows have begun to find a balance and it is unfortunately not a positive one.

Outflows Start To Dominate

The inflows and outflows for the last day have not been alarming in a way but the fact that it continues to skew towards inflows which us a testament to the sell-offs that have rocked the place. The data from Glassnode which shows the net flows between the two shows that more BTC was moving into centralized exchanges than those going out of them. A total of $729.7 million BTC were moved out of exchanges in the last day, while inflows came out to $766.9 million. This led to a net positive flow of $37.2 million.

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This comes as no surprise given that more investors are trying to get out of the digital asset to avoid incurring more losses. Even with the accumulation trend that has been recorded across large investors, it is still not enough to upset the amount of BTC being moved to centralized exchanges to be sold.

📊 Daily On-Chain Exchange Flow#Bitcoin $BTC
➡️ $766.9M in
⬅️ $729.7M out
📈 Net flow: +$37.2M#Ethereum $ETH
➡️ $316.1M in
⬅️ $281.1M out
📈 Net flow: +$35.1M#Tether (ERC20) $USDT
➡️ $364.9M in
⬅️ $403.5M out
📉 Net flow: -$38.6Mhttps://t.co/dk2HbGwhVw

— glassnode alerts (@glassnodealerts) July 12, 2022

This has negatively impacted the price of bitcoin given that the digital asset had declined below $20,000 once more. The fact that there is more USDT leaving exchanges than that coming in shows that investors are moving to stablecoins for safety. As such, they are not buying cryptocurrencies like bitcoin.

BTC loses footing above $20,000 | Source: BTCUSD on TradingView.com

Bitcoin Investors Try To Catch Up

Even though the price of bitcoin is still declining, the interest from investors, especially smaller ones, has not waned. This renewed interest is seen in the number of addresses holding at least 0.1 BTC. After falling during the price crash, the number has now recovered and has reached a new all-time high of 3,706,019 addresses with more than 0.1 BTC on their balance.

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Now, this has not affected the price much in any way given these smaller investors have little control over the market. However, it speaks volumes about how investors are viewing the current market climate, which to many has become an opportunity to buy coins at a discount.

Nevertheless, the digital asset continues to maintain bearish momentum. More addresses are being triggered as the price decline continues. Bitcoin is trending at $19,670 at the time of this writing and has now fallen below its $400 billion market cap.

Featured image from Analytics Insight, charts from TradingView.com

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Bitcoin is back below $20,000 and seems on track to re-test the bottom of its current range. The cryptocurrency was showing signs of recovery, but it was rejected near the critical resistance zone at around $22,000.

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At the time of writing, BTC’s price trades at $19,800 with a 3% and 2% loss in the last 24 hours and 7 days respectively.

In a recent market update, trading desk QCP Capital addressed the factor that might contribute to BTC’s price moving sideways for the foreseeable future. These included the upcoming Mt. Gox redemptions, and global inflation.

On the probability of the Mt. Gox repayments negatively impacting Bitcoin and the crypto market, QCP Capital wrote:

It is impossible to be certain about the exact impact, given the numerous cross-arguments and theories surrounding the release. Our main takeaway is that there is a high chance of BTC supply flooding the market soon.

In the best-case scenario, Bitcoin will face downside pressure allowing Ethereum and other altcoins to gain some breathing room. The sector might record some gains after an extended period of increased Bitcoin dominance.

The worst-case scenario is additional selling pressure for Bitcoin, as QCP Capital said, and the entire crypto market pushing prices to their yearly lows or deeper into bear market territory. A lot depends on Mt. Gox’s unlock schedule, and if the victims will succumb to market uncertainty or wait for BTC’s price to reclaim previous highs.

QCP Capital made the following prediction on what could be in store for Bitcoin in the short term.

We’re not outrightly bearish at these spot levels but we think the sudden demand for call structures might have pushed the risk reversal levels a bit too much to the topside. Our base case continues to be sideways trading with the risk of sharp dips and upside capped (…).

What Could Push Bitcoin Back Into The Green

Tomorrow, the U.S. will publish a new Consumer Price Index (CPI) print. After an aggressive shift in monetary policy from the U.S. Federal Reserve (Fed), market participants expect a decline in this metric.

If the CPI print signals a decline in inflation, the crypto market could see some relief. $18,600 and $22,000 will continue to operate as major support and resistance levels.

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In addition, analyst Ali Martinez indicated that Bitcoin is sitting at an “important demand wall”. There are 570,000 addresses that purchased BTC around its current levels, to the upside $20,900 is the next level to watch in case of bullish momentum, as seen in the chart below.