See More

Crypto Exchange Asset Inflows Sink to Market Cycle Low

2 mins
Updated by Kyle Baird
Join our Trading Community on Telegram

In Brief

  • Exchange inflows have fallen to $1.65 billion.
  • Low liquidity could induce higher volatility.
  • Crypto markets are still choppy, dropping 2% today.
  • promo

The amount of digital assets being moved into centralized crypto exchanges has fallen to its lowest level for this market cycle.

On May 23, on-chain analytics platform Glassnode reported that major asset inflows to crypto exchanges are currently at a cyclical low. Furthermore, they are at the lowest value since the start of the last bull market at $1.65 billion.

Glassnode commented on the low liquidity at the moment, and its correlation to crypto exchange flows:

“With exchanges being the primary destination for market speculation, a large compression in inflows highlights the fact that structural market liquidity remains extremely low.”

It added that this was compounded by the removal of major market makers. Earlier this month, global market makers Jane Street and Jump Crypto axed their U.S. trading plans due to the ongoing regulatory crackdown.

Crypto exchange flow across major assets – Glassnode
Crypto exchange flow across major assets – Glassnode

Crypto Exchange Liquidity Falling

The data suggests that low liquidity could induce higher market volatility. Earlier this week, BeInCrypto reported that higher volatility was on the horizon following a tightening of price ranges.

Moreover, Glassnode confirmed the findings stating that this could also be a catalyst for more volatility.

“With an increasingly illiquid market, with very thin order books, the likelihood of market volatility largely increases.”

Exchange inflows spiked during capitulation periods when speculators sent assets to exchanges in order to cash out. Conversely, exchange outflows could be a sign of more hodling and lower sell-side pressure.

This week, BeInCrypto reported that the dormant supply of Bitcoin had increased to new highs. This suggests a reluctance to sell and a propensity to hold, as ‘hodl wave’ metrics suggest.

The weak hands and leveraged speculators have already been flushed out of markets. What remains are those with more conviction and day traders trying to eke out a profit from these minor market swings.

Crypto Market Outlook

The sideways crypto market chop has continued with a 2% dump to follow yesterday’s 2% pump. Total capitalization is back down $1.17 following the minor slump during the early hours of May 24.

Bitcoin prices have dropped 2.4% on the day in a fall to $26,737 at the time of writing. However, the asset remains within its range-bound channel.

BTC/USD 1 week - BeInCrypto
BTC/USD 1 week – BeInCrypto

Ethereum has lost 1.7% in a fall to $1,823 but also remains range-bound as the chop continues.

Overall, crypto markets remain down 62% from their peak levels of just over $3 trillion in November 2021.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

profile.jpg
Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
READ FULL BIO
Sponsored
Sponsored