Bitcoin's recent price drop below $60,000 has triggered a surge in deposits to centralized exchanges, according to blockchain analytics firm CryptoQuant. The data shows that Bitcoin deposits reached nearly 50,000 BTC per day, which is a level not seen since earlier this year.
This spike in deposits coincides with Bitcoin testing the critical $60K support level, and analysts warn of increased volatility if it breaches this level, potentially taking Bitcoin towards $53K. Historically, such high deposit levels have preceded significant directional moves in the market.
Not only are the quantities of deposits increasing, but so is their size. The average Bitcoin deposit has doubled from 1 BTC to 2 BTC, indicating that whales and institutions are repositioning their assets rather than retail traders. This indicator has historically been a bearish signal for the price of Bitcoin.
The surge in Bitcoin deposits is not isolated to just the top crypto asset. Ethereum daily inflows have also peaked at 1.25 million per day, while other altcoin deposit transactions have jumped considerably to more than 45,000 per day. This trend suggests that increased volatility may be ahead for the entire crypto market.