Bitcoin Bulls Show Signs Of Exhaustion Around $78,000 — What’s Next?

Bitcoin had a modest start to May, with the flagship cryptocurrency rising as much as 3.5% on Friday. As of this writing, the premier cryptocurrency trades near $78,400, barely moving over the past day. Interestingly, a market pundit has explained how a perceived shift in Bitcoin’s investor behavior could be a major influence on the cryptocurrency’s inertia.

For context, the metric tracks the net amount of stablecoins entering or leaving Binance, thereby indicating whether buying power is accumulating (inflows) or being withdrawn (outflows) from the exchange.

According to Crazzyblockk, Binance (the world’s leading exchange by trading volume) had, on a daily basis, recorded significant amounts in net inflows from 14th to 22nd April. During this period, Binance saw daily inflows of $548 million to $1.14 billion in fresh stablecoins.

Interestingly, this consistent stream of inflows corresponded with Bitcoin’s recovery from $74,000 to $78,000. The crypto expert noted that this is a sign of “textbook buying power accumulation on Binance.” 

On the flipside, investors did not merely hold off on their liquidity; they may also be showing signs of a sentiment shift. Starting April 28, Binance has seen five consecutive days of stablecoin outflows, ranging from $1.54 billion to $1.78 billion each day.   

According to Crazzyblockk, a similarly heavy stablecoin sell-off has not been seen in the Bitcoin market since January 26. The last time it happened, daily outflows reached $3.2 billion, while the market leader traded near $89,500.

Hence, if the stablecoin netflows on Binance fail to transition back into the ‘inflows’ side, Bitcoin could be facing significant downside risk. To alleviate this risk, Crazzyblockk explained that fresh capital, in the form of stablecoins, would need to re-enter exchanges, especially Binance.