CryptoQuant says big bitcoin holders increased deposits to exchanges as prices fell

Following last week’s bitcoin price drop to around $80,000, large traders increased the amount of bitcoin they sent to exchanges, according to onchain analytics firm CryptoQuant.

The firm said the total number of bitcoin transferred to exchanges reached 9,000 BTC on Nov. 21, with 45% of that volume coming from large deposits of 100 BTC or more — a level it described as unusually high.

"This is evident in the average BTC deposit value shooting up to 1.23 BTC in November, the highest level in a year, from 0.6 BTC just a
week ago," CryptoQuant said. "This indicates that large deposits are leading exchange inflows, increasing the average deposit."

CryptoQuant also highlighted a sharp rise in the average bitcoin deposit size on Binance, increasing from 12 BTC at the beginning of November to as high as 37 BTC in recent days. The firm said this reinforces the view that larger holders are using the exchange to reduce their bitcoin exposure.

Overall, bitcoin exchange flows indicate that "investors and traders continue to sell bitcoin in the context of the current price drawdown, putting further downward pressure on the price," CryptoQuant said.

When asked how exchange flows can signal selling activity, CryptoQuant’s head of research, Julio Moreno, told The Block that the conclusion comes from observing who dominates spot trading.

"You can infer it by looking at who is dominating spot activity on exchanges, buyers or sellers," Moreno said, sharing the chart below. "Sellers have dominated since early October (red areas), although the last two days have been more balanced in terms of buyers and sellers (neutral, gray areas)."

Ether and altcoins exchange activity 

CryptoQuant noted that exchange activity in other major assets also remains elevated. Ether exchange inflows are increasingly dominated by large deposits, even though total inflows have not risen sharply. The daily average ETH deposit value has jumped to 41.7 ETH — the highest in almost three years — as the token fell to around $2,900, the firm noted.

As for altcoins, CryptoQuant said the total daily number of deposits has stayed relatively high. Transactions sending altcoins to exchanges have remained above 40,000 per day since July, with a recent peak of 78,000 on Oct. 17. "This situation also indicates the high exchange deposit activity for Altcoins in the context of the ongoing price sell-off," the firm said.