CryptoQuant analyst Julio Moreno stated that Bitcoin (BTC) flows from Coinbase to derivative exchanges have started to increase again, adding that this is a positive indicator.
The analyst Julio Moreno reminded that such flows give important signals for the market cycle. Accordingly, Bitcoin (BTC) flows from Coinbase to derivative exchanges are bullish news, while flows from derivatives exchanges to Coinbase give a bear market signal. When we examine the chart shared by the analyst, we notice that the market falls during periods when the entry to derivative exchanges from Coinbase decreases and reverses.
Although the increase in the inflows to derivative exchanges is a positive data for the upcoming period, when we look at the previous movements, we see that this flow should continue for a while and the price of Bitcoin is moving sideways at this time. CryptoQuant analyst Julio Moreno summarizes the relationship between Coinbase and derivatives exchanges with the following statements.
“The direction of bitcoin flows is an indicator of the market cycle. The market is in a bull run when bitcoin flows from Coinbase to derivatives exchanges. When the flows reverse and bitcoin starts to exit the derivatives exchanges and enter Coinbase, it can be interpreted as a sign that the market is in a downtrend.
Why is there such a relationship?
During a bull run, markets buy risk. In this context, bitcoin traders send their bitcoins to derivatives exchanges to trade bitcoins with leverage or to use their bitcoins as collateral for trading with other cryptocurrencies.
During a bear market, investors go into a "risk aversion" state. Therefore, bitcoin traders send their money from derivatives exchanges to spot exchanges to sell them and convert them into real fiat money.”
Bitcoin price is $20,756 as of now, while BTC's 24-hour trading volume is $32,841,443,324. BTC price is down -3.6% in the last 24 hours.