Hello,
I'm quite newbie to the bitcoin system, so my below theory might be nonsense... But I would like to know your opinion about it:
Given that:
- Bitcoin transfers are public
- We may know the addresses used by the main exchanges: people sending or withdrawing money must know them
- The transfers in/out of those addresses may be monitored
Would it be possible to deduce:
- If exchanges addresses are transferring money out --> people withdrawing money to hodl --> less offer --> price rises
- If exchanges addresses are receiving money --> people getting ready to sell --> more offer --> price falls
Would that be possible?
If so, is anyone already doing this kind of analysis? I didn't find any thread about it.
I don't know if this is possible
Even if you could carry out this type of analysis, I don't think you would get any coherent results since, to me, it is pretty meaningless anyway. How come? Simply because when people sell and buy at exchanges, they don't typically withdraw the proceeds. They just sit idly and wait for the price to rise (fall) in order to sell (buy) again, then rinse, repeat (and reap profits). And this happens many times until the trader decides to withdraw, so there is no way there could be a meaningful correlation between prices rising (falling) and the number of transactions made to and from exchanges. Hope this helps
But people shall withdraw their bitcoins from the exchange if they want to avoid losing them if the exchange closes, like Mt. Gox.
I agree that those doing trading will keep their money in the exchange, but cautious holders shall withdraw.