Bitcoin (BTC) Flows Fall to the Lowest Levels in 2022, But the Number of Active Receiving Addresses Have Been Growing

Bitcoin exchange flows might offer us interesting insights into the crypto's latest bullish wave.

Bitcoin investors have been closely watching the cryptocurrency's price as it inches closer to reclaiming the $70,000 level.

This anticipation is further evidenced by the high levels of unrealized profits, indicating that BTC holders are opting to HODL in anticipation of higher prices.

According to a recent analysis by CryptoQuant, Bitcoin currently boasts over $7 billion in unrealized profits. This observation highlights the extent of HODLing behavior and expectations of higher price levels.

However, it also underscores the potential for a significant retracement if or when profit-taking resumes.

If Bitcoin holders begin to realize their profits, the sell pressure could lead to an outcome similar to what was observed towards the end of July, when the price crashed sharply within a matter of days.

So far, the prevailing optimism has allowed BTC to sustain its gains on the charts.

At press time, Bitcoin was trading at $68,350, less than 2.4% away from hitting $70,000. The cryptocurrency also appeared to be approaching the next resistance zone between $69,400 and $71,500.

Bitcoin exchange flows reach 2024 lows

Bitcoin exchange flows could offer us some interesting insights into the crypto's latest bullish wave.

The last uptick in both exchange inflows and outflows occurred between 13 and 16 October. However, since then, exchange flows have cooled to their lowest levels this year.

Over the last 24 hours, 3,760 BTC flowed out of exchanges. At the same time, roughly 3,940 BTC flowed into exchanges, indicating that inflows were marginally higher.

BTC exchange flow swings suggest the cryptocurrency is up for another round of volatility. But will another leg up carry bullish or bearish momentum? We'll have to wait and see, but address flows could give us some indication.

The number of active sending addresses have been declining since mid-October. For example, they dropped from 860,161 addresses on 15 October to 478,148 addresses by 18 October.

In contrast, the number of receiving addresses increased from 379,545 on 13 October to 625,308 on 18 October. The data also showed that more addresses were buying Bitcoin than selling it, and receiving addresses increased while sending addresses decreased.

Address activity signaled a shift, indicating decreasing sell pressure despite the recent price surge. These observations suggest that Bitcoin could continue to push higher, although a surprise wave of sell pressure could still be lurking.