Bitcoin fell below $60,000 in early May, scaring the market and causing significant volatility in trading products. However, despite the massive volatility in derivatives, the spot market appears to have led most of this recovery, with volumes and inflows helping BTC stabilize at around $66,000 in mid-May. After a few turbulent days where BTC struggled to break through the $66,000 mark, we saw a sharp spike on May 20 that took the price above $70,000, injecting some much-needed optimism into the market. While BTC settled at around $70,100 on May 21, the important psychological level remained breached.
This optimism led to a notable increase in currency activity, evident from the rapid increase in inflows and volumes.
Between May 15 and 21, we saw quite a bit of volatility in transfer volumes to exchanges. On May 15, 39,095 BTC was transferred to exchanges, declining slightly to 38,031 BTC on May 16. Volume fell further to 33,242 BTC on May 17, indicating a trend of decreasing transfer volumes. A dramatic drop occurred on May 18, with only 12,243 BTC transferred to exchanges, followed by an even lower 11,156 BTC on May 19. However, this trend reversed on May 20, with a substantial increase to 33,484 BTC, culminating in a peak of 50,186 BTC. BTC on May 2. These fluctuations show how small price changes lead to significant investor activity and sentiment swings.
Exchanges’ transfer volumes showed similar variations. Between May 15 and 18, transfer volume from the exchanges dropped from 61,232 BTC to 14,454 BTC, followed by a further drop to 11,347 BTC on May 19. Similar to the inflow trend, outflow volumes increased to 36,468 BTC on May 20 and decreased slightly to 38,027 BTC on May 21.
Before the price surge, from May 15 to 19, Bitcoin’s price remained relatively stable with minor fluctuations. During this period, net transfer volume generally trended toward outflows, indicating holders’ reluctance to move assets to exchanges, possibly in anticipation of a price increase. The price surge and its aftermath on May 20 and 21 led to a notable change in investor behavior.
On May 20, Bitcoin’s price rose to $71,409, leading to increased transfer volume to exchanges (33,484 BTC) and high buying volume on the spot market (72,971 BTC). However, there were also significant outflows from the exchanges (36,468 BTC), showing that while some investors took advantage of the price increase by selling, others continued to buy, driven by bullish sentiment. On May 21, the trend reversed with a net inflow of 12,159 BTC.
The breakdown by size of currency transfer volumes helps us better understand what kind of traders are moving the spot market. The relatively small net inflows of transfers of less than $100,000 indicate that retail investors were cautious but gradually increased their holdings, reflecting growing confidence in price stability or the potential for future gains. The consistent inflows in the $100,000 to $1 million category on both May 20 and 21 show active participation from larger retail and smaller institutional investors, who likely saw the increase as a buying opportunity.
The net outflow of -3,336 BTC in the $1 million to $10 million range on May 20 implies that some large holders took advantage of the price spike to liquidate parts of their holdings. However, the reversal to a net inflow of 2,109 BTC on May 21 suggests that other large investors or the same entities have reinvested, possibly indicating a short period of profit-taking followed by renewed accumulation. The significant net outflow of -2,183 BTC on transfers of over $10 million on May 20 contrasts sharply with the substantial inflow of 6,604 BTC on May 21. This dramatic shift highlights strategic repositioning by very large investors, who initially sold at the price peak but quickly re-entered the market, possibly indicating long-term bullish sentiment or the use of advanced trading strategies to maximize profits .
The market’s reactions to these flows are clearly visible in the intraday spot buying and selling volumes. On May 15, spot buying volume was 69,519 BTC, dropping to 21,585 BTC on May 18. A significant increase occurred on May 20, with spot buying volume peaking at 72,971 BTC, before declining slightly to 61,119 BTC on May 21.
Spot sales volumes fell from just over $4 billion on May 15 to $1.458 billion on May 18. On May 20, spot sales volume increased significantly to $4.516 billion and further to $4.784 billion on May 21. While the increased spot buying volume reflects a rise in bullish sentiment, the corresponding high selling volumes show that a significant part of the market has benefited from the price increase.
Glassnode’s data shows that the market is tense and ready to react quickly to small changes in the price of Bitcoin. While this reaction is typical of the derivatives market, we also see a similarly aggressive reaction in the spot market. The rapid re-entry of major investors into the market shows that only a small amount of upside volatility is needed to revive belief in Bitcoin’s potential. The cautious accumulation of retail investors points to a gradual build-up of confidence, potentially paving the way for more sustainable price movements in the future.
The post that Bitcoin’s rise above $70,000 led to an influx of currency first appeared on CryptoSlate.