Here’s what could happen to the market

According to on-chain data provided by CryptoQuant, major Bitcoin addresses send funds to derivatives exchanges. The CEO of the company speculated that the reason could be filling margins or opening new positions.

The rapid increase in Bitcoin inflows from large exchange wallets can become a worrying signal for market participants because, in most cases, whenever funds are moved from a cash market to a cash market. derivatives market, it becomes a liquidation signal. Traders usually keep their funds on the exchange whenever they are anxious to sell them.

Whales send $ BTC to exchanges derived from other exchanges to create new positions or fill margins.

If you look at the historical data, the price goes up in the long run after it has accumulated. Their positions appear to be long positions.https: //t.co/O0imZE7DIv

– Ki Young Ju 주기영 (@ki_young_ju) September 10, 2021

But the CEO of CryptoQuant came up with another version: Some holders could start opening new long positions or funding their previous positions that came close to liquidations once Bitcoin fell sharply to $ 46,000. He also added that most of the time whenever these wallets transfer funds to exchanges, they accumulate large volumes of Bitcoin, resulting in explosive price increases.

Previously, an increased influx of derivatives was seen in October, just before the start of the last big bullrun in which Bitcoin went from $ 10,000 to $ 60,000. The reason for such a big price increase was the highly leveraged positions. In order to ensure a significant increase in market volatility, most positions need to be funded through derivative exchanges that offer high margins to traders.

The market is unlikely to see the effect right away as the volumes moved are too large to be executed immediately. At the time of going to press, Bitcoin is trading at $ 46,000 after falling sharply from $ 52,500 to $ 43,000 in one day.