The CEO of blockchain analytics firm CryptoQuant, Ki Young Ju, has observed that the biggest Bitcoin (BTC) traders are becoming more risk-averse. He points to the Interexchange-Flow-Pulse (IFP) indicator, which tracks the flow of BTC between spot and derivatives exchanges, as evidence that whales are now in “risk-off mode.” Traders typically deposit assets on derivatives exchanges to use them as collateral for leveraged positions. Ju notes that the IFP is currently below its 90-day moving average, indicating a shift in market sentiment.
The IFP indicator turning red suggests that whale traders on derivatives exchanges are moving into risk-off mode. Increased flows from spot to derivative exchanges could indicate that BTC is being used as collateral for new or existing positions. Whales moving BTC to derivatives often signal long positions, particularly at cyclical market bottoms. The strategy is to target Bitcoin exposure during IFP uptrends, with crossovers of IFP’s 90-day moving average marking market shifts.
As of the time of writing, Bitcoin is trading at $62,290, experiencing a more than 3% decrease in the past day. CryptoQuant has also noted that Ethereum’s Market Value to Realized Value (MVRV) indicator is rising faster than Bitcoin’s MVRV. MVRV is a ratio that compares a digital asset’s market capitalization to its realized capitalization, used to assess whether the token is overvalued or undervalued. The rising MVRV for Ethereum suggests that its market is heating up, historically leading to other altcoins following suit.
Ethereum is currently valued at $3,366, down over 4% on the day. Overall, the data from CryptoQuant indicates a shift in market sentiment among Bitcoin traders towards more risk-averse behavior. The IFP indicator and MVRV ratios provide insights into the movements of whales on derivatives exchanges and the overall market sentiment towards BTC and ETH. It is important for traders to stay informed about these indicators to make informed decisions in the volatile cryptocurrency market.
To stay updated with the latest developments in the cryptocurrency market, subscribers can sign up for email alerts directly to their inbox. They can also follow CryptoQuant on social media platforms like X, Facebook, and Telegram. By monitoring these indicators and following expert analysis, traders can better navigate the fluctuations in the cryptocurrency market and make informed trading decisions. Keeping track of market trends and whale activity is crucial for success in the fast-paced world of digital assets.