On December 23, 2022 large Bitcoin movements occurred from the addresses of OKX, one of the largest exchanges. The movements were anticipated by a tweet alert :
Due to wallet maintenance, we will be transferring coins and tokens between our wallet addresses over the next 24 hours. Large transfers will be seen in our wallets.
Address movements are part of an OKX transparency effort to show Proof-of-Reserves (PoR) on its website.
The Proof of Reserves is the second one, and it adds new features. Users can now view the independently the results of on the OKX website through open source tools available on the OKX GitHub profile at the following address:
OKX has published over 20,000 addresses, and it seems they plan to continue to reuse addresses so that anyone can perform a stand-alone, independent audit, plus OKX promises to run reserve tests on a monthly basis.
OKX Inflow Outflow may continue in the coming hours.
Late in the evening of December 14, 2022, an address that had been dormant since 2017 awoke and executed outgoing transactions.
The address 1E278SJDBAuCEJX9LNfwK5AwkViG5edStx is a Legacy Address (P2PKH – Pay To Pubkey Hash) and has performed splits to SegWit addresses.
Address bought in April 2017 when Bitcoin was trading at $1,333 for a total expenditure of $801,203 for a net gain today of nearly $10 million ($9,900,692).
Onchain analysis indicates that Bitcoins were purchased on Bitfinex, while outbound transactions are likely a rotation to Segwit addresses. There are no apparent Inflows to Exchange at this time, but we will follow up in the coming hours and communicate any noteworthy updates if necessary.
A rather anomalous outflow movement from the Binance Hot wallet has occurred in the past few hours. Over 38,000 Bitcoin (About $661 million) have been transferred out of the Binance wallet in just 48 hours. As can be seen on every timeframe, the Outflow is way out of scale.
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An abnormal event in a short period of hours, all the more so at the current price level, especially from one exchange : Binance.
Source : https://btcinoutalert.net/Live-Report/
All Bitcoins are coming out of the Binance Hot Wallet, a single address : bc1qm34lsc65zpw79lxes69zkqmk6ee3ewf0j77s3h
In recent hours there have been unhappy reports about Binance and its possible failure to cover. We will be following very very closely in the coming hours; we may be at the beginning of something very very important.
Outflow movements are still occurring, so new updates will follow.
As explained in the previous post (which you can read here if you haven’t), a mysterious user named OneSignature appeared on the BitcoinTalk forum, a historic forum where there are numerous Satoshi posts, signing an address with bitcoin mined in 2009 and an outgoing transaction in 2011. The address (1NChfewU45oy7Dgn51HwkBFSixaTnyakfj) has block mining TX 1018. The signature is the most dated/oldest ever to appear on a bitcoin address.
The (few) certainties
Let us start with the few certainties, namely the signature and its verification.
We have noticed some unnecessary discussions about the supposed invalidity of the signature, and let’s settle that right away; the signature is authentic. We used Electrum connected to a Bitcoin full node, but you could use hundreds of other different methods; the signature is certainly authentic. After making sure that the signature is authentic, let’s take a closer look at the blockchain to understand more about it.
The analysis of blockchain
The address signed by OneSignature contained 50 Bitcoin that are aggregated to the address 1LseHYUYUXkL4Jdd4YTTXvWNqDceTdQXrt along with another 1,950 BTC, this occurs in 2011.
From signed address to aggregation
The Bitstamp inflow
Next, some transactions occur that deserve attention for analysis. Some Bitcoin are deposited at the address 17jz6XcXP2LPqS8gYmT2pkNJocUDzbpQuM traceable to a Bitstamp.net deposit address. On the same deposit address it is also possible to reconstruct most of the additional addresses owned by the same owner.
A total of 9,106 Bitcoins are deposited at the Bitstamp address, all transactions traceable to the same owner, and deposit activity occurs through December 22, 2014. Almost all of the Bitcoin are mining rewards.
From MtGox further transactions to the address 1QY4sSvRw2jS6QPn7GjYLaWwW73u8MLsb traceable to SilkRoadMarketplace, the famous Darknet marketplace for which Ross Ulbricht is now serving a life sentence.
Below is a complete representation of the flow.
We can exclude that OneSignature is Satoshi
Satoshi is a careful person, manic about privacy. The chances that OneSignature could be Satoshi in my opinion are ZERO. Satoshi would never, with such superficiality, leave such obvious traces, especially to two CEX exchanges that can easily identify his identity. It is not in his philosophy and it is not in his way of acting, always attentive to every single detail since the early days and he would never have committed such trivialities.
But we continue to explore further
Patoshi signature
If all these clues are not enough, further verification clues may come from independent researcher Sergio Demian Lerner. It has carried out an in-depth analysis on the possible blocks extracted from Satoshi, they are vulgarly called Patoshi Block.
Explained in a very simplified way, Satoshi most likely used a different mining software than the one initially distributed, so it was possible through traces left behind in block mining to reconstruct what are most likely blocks mined by Satoshi.
If we go to analyze block 1018, which is the one precisely signed by OneSignature, it does not show up among the possible Satoshi extracted blocks:
Screenshot Source : http://satoshiblocks.info/
Conclusion. Where did that signature come from and why? The possible idea of NFTs
One of the most likely explanations is that someone may have sniffed out a business opportunity: converting old BTC addresses to NFTs and then selling them. Such old types of addresses may acquire archaeological value. You may not even need to own the private key to own the NFT. You can learn more about the idea in this post. https://bitcointalk.org/index.php?topic=5425241
An idea that I think is difficult to develop, but which confirms for us a doubt:
Onchain data are becoming increasingly important in the Bitcoin world, this is because they are useful in interpreting and often anticipating Bitcoin price movements. We have noticed how there is an openness even from major Exchanges in publishing onchain data (Kraken for example publishes excellent analysis, find the link at the bottom of the page of their analysis).
There are many useful onchain indicators, but today we will focus on Netflow, which is the most natural movement of bitcoin to exchanges, and bitcoin in exchanges are the ones that generate the price for an ordinary person.
What is Netflow
Netflow is an onchain analysis tool that compares price trends with the trend of Bitcoin volumes inflow and outflow of exchanges to study the likelihood of a trend reversal.
1 year of Netflow. Source : BtcInOutAlert.net
Its purpose is also to help traders understand whether a Bitcoin is currently accumulating or distributing. Although it was originally designed for use on Bitcoin, market logic has meant that it finds wide applications in the world of shitcoins, which we will not cover because they are totally irrelevant (the shitcoins)
Thus, Bitcoin accumulation and distribution allows you to interpret the trend and can be used both when a trend is up, to determine the likelihood that it will advance, and when a trend has already clearly manifested itself and you are trying to figure out whether a reversal is imminent or not.
Netflow as an indicator of accumulation and distribution
Netflow is a tool for measuring in Bitcoin the volume in and out of the Exchange, which assesses the cumulative inflow and outflow of Bitcoin from a given Exchange; simply put, it measures the price and volume of Bitcoin to determine whether it is accumulating or distributing.
The indicator also provides information about the strength of a trend. For example, when the price of the asset is rising, but the Netflow indicator is negative this may indicate that the volume of accumulation, and therefore buying, is not strong enough to support the rising price. These circumstances could mean that a price decline is imminent in the short term.
How to use Netflow as an indicator of accumulation and distribution
If the market price is in an upward trend, the indicator will be rising, reflecting buying pressure, while in a downward trend, the indicator will be falling, reflecting selling pressure; if this is not the case, we are in a divergence.
One of the great advantages of this indicator is precisely the issue of divergence. In fact, if the market price is in one direction and the indicator is in the opposite direction, it is usually a very interesting warning that the market may reverse its trend.
Thus, the most reliable signals provided by Netflow, accumulation or distribution, are divergences.
The buy signal will appear with a positive divergence, that is, when the market price is falling but the Netflow is rising. In this case, the analyst should be alert because there is a good chance that the price will soon turn upward.
A bearish divergence sell signal would occur when the market price is rising but the Netflow is falling. In this case, the technical analyst should be alert because there is a good chance that the price will soon turn downward.
Strategy with the indicators of accumulation and distribution
As you now know, the Netflow therefore creates both bullish and bearish signals. These signals are based on divergence and its confirmation.
Although the use of Netflow alone is feasible, it is more advantageous to add other indicators such as Data Volume, Address Distribution, Dormant Address Activity, Long Term and Short Term Holder. They provide additional data and useful ranges to be used to highlight extreme conditions for which Netflow was not designed, although they do so differently.
Conclusions
Netflow is an extremely useful onchain indicator for measuring the cumulative capital flow for a financial asset such as a currency pair (BTC/USD). It is based on both price and volume and can be used as a tool to monitor trend.
Divergences between this indicator and the asset price are usually fairly reliable signals of trend change; they are data that the Blockchain provides us with, public, which employed in conjunction with additional analysis tools can confirm the signals.
As is always the case, large amounts of bitcoin on the chain create extreme excitement, euphoria or panic, even more extreme excitement when the movement occurs from one of the addresses owned by larger exchanges: Binance.
Big movements from Binance Wallet
During the early hours of November 18, 2022 , from the address traceable to Binance dedicated to the BTC-B peg 3LYJfcfHPXYJreMsASk2jkn69LWEYKzexb various movements to and from, through multiple addresses all traceable to Binance are reported.
It is important to know up front that all movements are zero-sum, meaning that the same amount of Bitcoin is in Binance wallets both before and after the movements.
The certainty that the wallet is traceable to Binance and dedicated to the BTC-B peg comes directly from the owner of the address according to several sources :
Bitcoin BEP2 (BTCB) is a token on Binance Chain issued by Binance, where the price is pegged to BTC at a rate of 1 BTCB = 1 BTC. BTCB is 100% backed by the same amount of BTC in our public reserve address below.
The main benefit of offering crypto-pegged tokens is that, obviously, this makes available to Binance DEX traders the many coins that have their own blockchains and aren’t native on BNB Chain.
Simply put, Binance stores Bitcoin reserves in a dedicated address, verifiable address to ensure liquidity on its chain.
Bitcoin Binance reserves track liquidity. The more liquidity on the Binance chain, the more Bitcoin reserves are held in reserves.
Will the Bitcoin removed from liquidity be SOLD at market?
This question will not be answered, but you will give yourself an answer, and the whole thing is based on logic. To give you an answer you first need to understand how liquidity works on the Binance chain, and again we quote Binance’s words :
This provides an easy way for anyone to convert from the pegged token back into the native coin on Binance.com. If this buy order is filled, a new order will be placed while an equal amount of funds will be deposited from the reserve address into Binance.com. The sum of the buy order and the funds on the published reserve address will be bigger than the total supply of the pegged token, ensuring there is always 100% backing.
If those Bitcoin were subtracted from the reserves of the Binance BTC-B address this is a consequence of liquidity leaving the Binance chain, not the other way around. If there is less liquidity on the Binance chain less Bitcoin are needed as collateral, not the other way around.
Is this liquidity outflow bullish or bearish?
This Bitcoin liquidity coming out of the BTC-B reserve addresses are neither bearish nor bullish, but reflect what on the Binance chain HAS ALREADY HAPPENED.
The fear instilled by some people is a very sad story!
As we can see from the dormant address chart, 1000 dormant bitcoins were moved today.
Among these 1,000 bitcoins, 50 caught the eye. These 50 bitcoins have been standing still since May 2010, more than 12 years.
These bitcoins have been mined and have no previous history, until now.
Source screenshot : Bitinfocharst.com
The address is : 1LB8BHdaRjeRsxz8SqiAFFQLjXkzCKsgvX
The transaction was sent to a temporary address, and then to an address containing 25 bitcoin on June 23, 2022, a sign that it is most likely an entity that purchased over the counter (OTC, off exchanges or with exchanges acting as a middleman); these are typical movements of entities, small or large, that accumulate over the long term.
Bitcoin that have no previous transaction history are very attractive to institutional entities, banks, states, companies, this is because it frees them from any possibility of abnormal transactions. Generally these bitcoin have different prices, often higher than market prices.
This transaction does not currently appear to be sent to a known exchange address.
Is it a real BTC accumulation or is it a rush to withdraw the money ?
November 13, 2022 More than 58,000 Bitcoin have gone out in the past 7 days, one of the weeks with the highest number of bitcoin gone out. Outflows not seen in many months.
Bitcoin Netflow Report – 13/November/2022 09:27 UTC
The 4H rolling graph shows an exponential increase in outflows as soon as the rush to exit FTX began.
Bitcoin Netflow H4 Rolling – 13/November/2022 09:01 UTC
A great help comes to us from Onchain data in its completeness Historically, addresses over 100 and 1K Bitcoin are from large funds and Big investors.
Both have been declining for the last 30 days, and in the last week there has been no increase
Addresses greater than 100 BitcoinAddresses greater than 1k Bitcoin
In opposite, very small portfolios are in vertical increase Use your head, make your own assessments, use our free and independent data.
An alternative netflow service indicated an outflow of 52.360 Bitcoin from Binance. Is this real?
NO, it is a MEGA Fake News. Binance performed an internal movement of 30.000 BTC in cold wallet, remaining 51.841 are in a Change Address, so same owner, so still Binance
BtcInOutAlert regularly reported IN REAL TIME what was happening.TX : a98b4b1eb25166cda54abb9e90f7f2b57dae402ab6f995a27a5e3763ab625e5d
Distribution of addresses greater than 10k Bitcoin
Analysis on addresses over 10k Bitcoin
Are Institutions and Funds Accumulating Bitcoin ?
Is it true what onchain services and people are currently stating, that INSTITUTIONAL and FUNDS are accumulating Bitcoin?
This is a partial analysis, in fact we are only going to deep dive on wallet above 10k BTC (>$200m), since those are the most representative ones for possible accumulation of Funds and Institutionals
NOW we have 101 wallet with balance greater than 10k
Addresses with #BTC balances greater than 10k are 20% of the total circulating. Chart showing distribution of Exchange, Hack & Confiscated, old holders.
Considering wallet with a balance greater than #1k Bitcoin the trend is even declining, so those greater than 10k are key
As can be seen most of the wallet above 10k are now bitcoin in the hands of exchange and only a tiny fraction are Holder Fund-Institutional. Only 4% are effective accumulation of the total above 10k
