• Bitcoin is approaching $43,000, and indicators point to a bull market ahead

  • Bitcoin fund flow ratio is decreasing across all exchanges, while BTC transactions are increasing. This could indicate that a bull market is on the way.

    The Bitcoin Fund Flow Ratio for All Exchanges is Declining

    According to a CryptoQuant post, the BTC fund flow ratio for all exchanges appears to be declining. In addition, BTC transactions are increasing.

    The Bitcoin fund flow ratio is a metric that is defined as the total amount of BTC going into or out of exchanges divided by the total amount of BTC transferred across the entire network.

    Total Exchange Inflows + Outflows in BTC = Fund Flow Ratio Total Transferred BTC (whole network)

    Essentially, the indicator shows the percentage of BTC involved in exchange-related transactions compared to the total number of transactions on the network.

    The fund flow ratio can be used to determine what percentage of BTC transactions occur outside of exchanges. That is, through methods such as over-the-counter (OTC) transactions or peer-to-peer (P2P) transfers.

    The total number of tokens transferred is another important metric here. This indicator, as the name implies, displays the total amount of BTC that has been transferred on the network in some form.

    Now, here’s a graph showing the trend in both the BTC fund flow ratio and total tokens transferred:

    The two Bitcoin indicators are indicating a bullish trend | Source: CryptoQuant

    As the graph shows, the BTC fund flow appears to be decreasing while the tokens transferred metric is increasing.

    This means that, while fewer transactions on exchanges usually indicate low volatility, total transactions are increasing across the board. This would imply that OTC transactions are skyrocketing (and thus occupying a relatively higher percentage), rather than a drop in volatility itself.

    The combination of these indicators behaving in this manner is usually interpreted as a bullish sign. Similar signals were present in August of last year, before the bull run began.

    Bitcoin Value

    At the time of writing, the price of Bitcoin is around $42.7k, up 9.5 percent in the last seven days. The value of the cryptocurrency has increased by 23.5 percent in the last month.

    Bitcoin appears to be on a sharp uptrend as it approaches $43,000. It is unclear whether BTC can continue its rally and go beyond this point, or if it will crash again, as it did at the beginning of the month. If the indicators discussed above are correct, a bull run appears to be more likely at the moment.

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