Key Takeaways
What’s fueling Bitcoin’s recent price surge?
Declining exchange inflows and aggressive whale accumulation are driving Bitcoin’s upward momentum.
What could threaten Bitcoin’s rally toward a new ATH?
Overbought conditions and potential buyer exhaustion may trigger volatility and a dip toward $116,821.
Since hitting a low of $109k a week ago, Bitcoin [BTC] has experienced strong upward momentum, hitting a high of $123,966.
In fact, at the time of writing, Bitcoin was trading at $122,304, marking a 1.6% rise in 24 hours and 11.87% on weekly charts.
But what’s behind Bitcoin’s recent strength?
Bitcoin inflow on Binance hits historical lows
According to CryptoQuant’s analyst Darkfost, Bitcoin’s Inflows (30DMA) have dropped to an all-time low, slipping below 5.4k BTC.
Source: CryptoQuant
Historically, BTC inflows into exchanges have spiked when prices rebound, as holders turn to profit-taking.
Thus, this shift in behavior signals a total change in market dynamics. In fact, since BTC rebounded, it has recorded more inflows only once in eight days.
Over this period, Exchange Netflow has remained chiefly negative, with a sharp drop to a monthly low of -26k BTC on the 3rd of October.
Source: CryptoQuant
Since 2020, average Bitcoin inflows to exchanges have typically been around 11,000 BTC, double the current levels.
This sharp decline reflects a significant shift in investor behavior, with more holders choosing self-custody and long-term storage over exchange deposits.
Consequently, the amount of BTC available for immediate selling has dropped, reducing overall market selling pressure.
Buyers dominate the market
AMBCrypto observed that inflows into exchanges, including Binance, have declined, driven by increased accumulation. Thus, most investors entering the market are entering on the demand side.
According to CryptoQuant data, for the first time in the past 30 days, Bitcoin Taker CVD has held green for two consecutive days.
Source: CryptoQuant
At press time, this metric was green, signaling that buyers have totally dominated the spot market.
Usually, when buyers dominate, they tend to remove their assets from CEX like Binance and store them in private wallets or cold storage.
Who is buying, though?
AMBCrypto’s analysis of exchange activity reveals that whales have shifted toward aggressive accumulation.
Checkonchain data shows a sharp decline in exchange balances, with MegaWhales Exchange Balance Change dropping to -54,000 BTC on October 4, and overall whale balances falling by 80 BTC.
This indicates that whales are withdrawing large amounts of Bitcoin from exchanges, a strong signal of accumulation.
Source: Checkonchain
Such a massive drop suggests that whales have withdrawn more BTC from exchanges than deposited, a clear sign of aggressive accumulation.
Historically, increased whale buying pressure has preceded intense upward pressure on assets, a precursor to higher prices.
Is a new ATH within reach for BTC?
According to AMBCrypto, Bitcoin rallied, nearing its ATH, driven mainly by reduced selling activity, as exchange inflows dipped while whales accumulated.
As a result, its Stochastic RSI soared to 99, at press time, reaching overbought territory. At the same time, the Directional Movement Index (DMI) jumped to 37.
Source: TradingView
Typically, when these momentum indicators hit such levels, it signals strong upward momentum but also warns of looming volatility.
Therefore, under these market conditions, the uptrend is likely to continue. If exchange inflows remain low backed by whale demand, BTC will reclaim $123,700, test its ATH at $124,517, and target another high.
However, if overbought conditions mean buyer exhaustion giving space to sellers, volatility to the downside will see a dip to $116821.
