A bigger circle in a certain price range means that there is a bigger concentration of addresses that bought Bitcoin with an average price within that price range.
As the indicator shows, now that Bitcoin is just below all-time highs, 5 million of addresses have an average buy price that is below the actual market price, so they are in profit.
Furthermore, this indicator can be used to spot key support and resistance price levels, similarly to volume profiles, a popular indicator of technical analysis, but with on-chain data.
The fact that this indicator is at all-time highs and rising means that the average of Bitcoin transactions is six figures, which is a good hint that many of the transactions performed in the Bitcoin network are done by institutions.
The netflows indicator is calculated by summing all the inflow volume of Bitcoin entering in all exchange addresses and resting the outflow volume that comes out from all exchange addresses to users’ wallets.
A trend in positive netflows could be a sign of distribution between investors since there is a higher volume of coins entering the exchanges most likely to be sold.
As can be appreciated in the chart, these last weeks had notorious negative netflows, with one day peaking up to $2.68bn.
The sum of bullish indicators and the cumulation of recent positive macro perspectives over Bitcoin do not point at any signs that would make investors turn their bullish view to bearish for the end of the year.
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