- A graph showing a potential change in the trend of bitcoin held on exchanges has caused debate
- Journalist Colin Wu pointed to a graph showing that more bitcoin is flowing back to exchanges
- Respondents argued that a trend change cannot be identified yet
The amount of bitcoin sent to exchanges could be about to reverse, ending a months-long trend of withdrawals in a sign that the final leg of the bull run may be coming. Data from Glassnode and shared by Chinese cryptocurrency journalist Colin Wu shows that the trend for taking bitcoin off exchanges that began around July has reversed sharply in the last few days, suggesting that bitcoin holders are now sending it to exchanges in preparation to sell. However, those responding to Wu’s post were critical of the inference, showing evidence that the uptick is just another bump in a road that is heading steadily downwards.
Bitcoin Exchange Balance Shift Too Early to Judge
Wu posted the Glassnode chart earlier today, adding that the last few days has seen a sharp change in course for the trend in taking bitcoin off exchanges:
Recently, the total Bitcoin balance of the exchanges has ended its downward trend for several months, and the trend has begun to reverse. pic.twitter.com/DKdXPJN3Mz
— Wu Blockchain (@WuBlockchain) December 1, 2021
Wu went further and suggested that the trend has “begun to reverse”, which was a theory that didn’t go down well with many of his respondents:
— Cryptolocity (@Cryptolocity) December 1, 2021
— Дмитрий Зотов (@urokskachat) December 1, 2021
In truth, it is hard to say at this point that the upturn points to a trend reversal. The trend has only just changed direction – it needs to go far longer in the opposite direction before it can be considered a change in direction as opposed to a small correction. As the replies show, there have been several ‘changes in direction’ over the past few months in bitcoin balances on exchanges, none of which have panned out as longer-term trend changes.
Wu’s implication of course is that it is selling season and that the bull run, or at least the recovery since July, is coming to an end. Naturally, price action will dictate this, but if the trend Wu highlighted does turn out to be a change in direction then it may be time to think about taking profits.