On Tuesday (June 23), Ki Young Ju, the CEO of South Korean blockchain analytics startup CryptoQuant, used on-chain data from his company's CQ.Live platform to explain why he believes Bitcoin's next bull run will start in July 2020.
Currently, the CQ.live dashboard provides an easy way to look at many on-chain metrics across nine categories: six for Bitcoin (Bitcoin Exchange Flows, Bitcoin Risk Indicator, Bitcoin Network Data, Bitcoin Miner Flows, Bitcoin Inter Entity Flows, Bitcoin Market Data); one for Ethereum (Ethereum Exchange Flows); and two for stablecoins (Stablecoin Network Data and Stablecoin Market Data).
In a Twitter thread on Tuesday, the CryptoQuant CEO focused on one of the metrics in the Bitcoin Exchange Flows catgeory. The metrics in this category provide "a way to track money moving in and out of Bitcoin markets."
CryptoQuant uses data from the following crypto exchanges: BitMEX, Binance, Huobi Global, FTX, Bybit, Gemini, Bitfinex, OKEx, Kraken, Bithumb, Coinone, Gopax, Korbit, Bitflyer, Gate.io, Coinbase, and Poloniex.
As CryptoQuant has explained several times in the past, total BTC inflows into all wallets owned by crypto exchanges tends to decrease when the price of Bitcoin is going up and vice versa, i.e. in other words, when Bitcoin whales start moving their BTC to crypto changes, it would be reasonable to assume they are doing so because they are planning to sell their BTC, which would then cause the Bitoin price to go down:
The CryptoQuant CEO used the metric Bitcoin Average Exchange Withdrawals (7MA), which is the seven-day moving average of mean outflows from all exchanges, to look at bull markets in 2018 and 2019 and show that in both cases the start of these bull markets was preceded four months earlier by this metric reaching a year-high value:
BUY #BTC when whales send bitcoins out of the exchange. The BULL market usually starts four months after the exchange average withdrawal hits year-high.https://t.co/JPbe3Pcaaw pic.twitter.com/UMBtAacyTh— Ki Young Ju (@ki_young_ju) June 22, 2020
He argues that if you accept that this correlation exists, then when you look at the data for this year, you see that the seven-day mean outflows reached a year high on March 18, which means that Bitcoin's next major bull run could start around mid July:
He then went on to show that if we look at data from 2013 to 2017, it seems to tell us that when Bitcoin whales are busy moving BTC out of exchange wallets, which tend to happen when the price of Bitcoin is going up, then we are in a "BTC accumulation phase":