DanBTC916
Identifying Near Term Sell Signals Using Mean Spot Exchange Inflows
Hi everyone, it's great to be back. Hope everyone is ready for the 2024 halving and bull market! This post was inspired by the CQ author Onchain Edge's recent analysis on Mean Exchange Inflows exceeding 15, which triggers a near term sell signal suggesting Whales are taking profit. I made slight adjustments using different time frames and trigger levels, and also found this to be a potential leading indicator for a near term sell off. The Exchange Inflow (Mean) metric set on hourly time frame, with a trigger point at or above 7 BTC does a relatively good job at predicting near term selling pressure. Looking back from late 2022 to now, whenever Exchange Inflow (Mean) rises above 7 BTC for the hour, this has led near term selling pressure within a few days. As shown in the charts below, this metric exceeded 7 BTC (blue line crossing above the white horizontal line) in October 2022, November 2022, February 2023, and more recently December 20th and 23rd, 2023. I must emphasize, this isn't a perfect indicator, as this metric spiked above 7 during the lows of the 2022 bear market, which did lead to sideways price action, but overall, its been quite helpful in predicting near term sell pressure. With the recent sell signal flashing within the last week, its good to see Bitcoin correcting after an impressive rally, driven by anticipation of the Spot BTC ETF approval. If we see more readings above 7 BTC, I will remain near term cautious on BTC and anticipate further near term downside. Near term technicals have also been forming bearish divergence. Let me know what you think.