CryptoOnchain
Bitcoin’s Fund Flow Ratio Hits Historic Low: Is Selling Pressure Weakening?
On-chain data is sending a powerful signal that potential selling pressure on Bitcoin is weakening. The Fund Flow Ratio, which measures the proportion of exchange inflows and outflows relative to the total on-chain transaction volume, has plummeted to its lowest level since July 2023. This metric indicates what fraction of total network activity is related to exchanges—the primary venues for selling. A sharp decline in this ratio signifies that the vast majority of Bitcoin transactions are currently occurring outside the exchange ecosystem. These activities predominantly consist of transfers to private wallets for long-term holding (self-custody), Over-The-Counter (OTC) deals by large entities, and usage in DeFi protocols, rather than preparation for a sale. In essence, the Bitcoin network is being utilized more for value transfer and accumulation than for short-term speculation. Crucially, this trend is even more pronounced on Binance, the world’s largest spot exchange. The significant drop in Binance’s Fund Flow Ratio suggests that even the most active market participants are reducing their selling-related activities and showing a stronger inclination to hold. Conclusion: This historic decline in the Fund Flow Ratio, particularly on Binance, is a bullish mid-term indicator. It points to a market characterized by strong-handed holders and accumulation, suggesting that the liquid supply available for sale on exchanges is tightening, which could lay the foundation for a sustainable upward move with reduced selling pressure.