Bitcoin is currently trading at around $97,000 within the past 24 hours, maintaining a range between $98,600 and $95,000 over the past week.
While the price continues to fluctuate within this zone, recent data points to a concerning trend among Bitcoin traders that could signal an impending price drop.
According to on-chain analytics platform IntoTheBlock, Bitcoin recorded around $1.4 billion in net inflows into crypto exchanges last week. This movement of Bitcoin onto exchanges is often seen as a bearish signal, as it suggests that more investors are preparing to sell rather than hold.
Exchange Inflows Indicate Growing Market Hesitation
IntoTheBlock’s latest data, shared on social media platform X, highlights that approximately $1.04 billion worth of Bitcoin was deposited into exchanges last week. This influx reversed the outflows observed over the previous three weeks, indicating a shift in investor sentiment.
A major reason behind this shift is the prevailing global economic and political uncertainty, which has led many Bitcoin holders to reconsider their positions. The sudden increase in exchange inflows suggests hesitation among investors, possibly preparing to sell off their holdings if market conditions worsen.
Declining Network Activity Adds to Bearish Signals
Adding to concerns, Bitcoin network activity has slowed down, as reflected in a notable drop in transaction fees. On-chain data shows that Bitcoin transaction fees fell by 10.74% compared to the previous week.
A decline in transaction fees is generally considered a bearish indicator, as it reflects lower network activity and engagement. In contrast, rising transaction fees typically signal increased demand and higher market participation. The current drop suggests reduced interest, which could weaken Bitcoin’s price momentum further.
Spot Bitcoin ETFs Could Be Behind the Rising Exchange Inflows
One of the key drivers of Bitcoin’s rising exchange inflows could be outflows from US-based Spot Bitcoin ETFs. These ETFs have played a significant role in Bitcoin’s bullish momentum this year, consistently driving up demand. However, recent data suggests that the trend has shifted.
According to SosoValue, Spot Bitcoin ETFs in the US recorded $651.83 million in net outflows over the past week. This marks the largest weekly outflow since the first week of September 2024. The sudden reversal suggests that some institutional investors have been offloading Bitcoin, either to take profits or due to uncertainty following the sharp price correction earlier in February.
Bitcoin Faces Key Supply and Demand Levels
The surge in Bitcoin exchange inflows creates a bearish scenario, as it increases selling pressure on exchanges. Technical analysis indicates that Bitcoin is currently trapped between key supply and demand levels, which could determine its next major move.
Crypto analyst Ali Martinez notes that there is a strong demand wall of 1.43 million BTC between $94,660 and $97,540. On the other hand, a supply wall of 1.16 million BTC sits between $97,650 and $99,470. This means that Bitcoin’s price could remain range-bound until a breakout occurs in either direction.
If Bitcoin manages to break above the $99,470 resistance level, it could trigger fresh buying momentum and push the price above $100,000 once again. However, if selling pressure continues and Bitcoin falls below the $94,660 support level, a more extended correction could follow.
Bitcoin’s rising exchange inflows, declining transaction fees, and Spot Bitcoin ETF outflows indicate growing market uncertainty. The price remains in a critical range, with both bullish and bearish possibilities on the horizon.
A breakout above $99,470 could signal renewed momentum, while a drop below $94,660 could lead to a more severe correction. For now, traders remain on high alert as Bitcoin hovers at $97,504, awaiting its next big move.
The Information is Collected from Bitcoinist and Coingecko.
