Bitcoin (BTC) inflows to centralized exchanges have surged, prompting bearish speculation that the crypto markets could be building up to a violent wash-out.

Lex Moskovski, chief investment officer of Moskovoski Capital, shared data showing that 22,917 BTC was transferred onto centralized exchanges in a single hour on Tuesday. Moskovski noted the hourly inflow was the largest since the March 2020 “Black Thursday” crash.

With outflows from exchanges typically being inferred as indicating crypto assets are being moved into cold storage for security or DeFi protocols for yield generation, inflows are interpreted as assets being moved onto centralized platforms to be sold.

Data compiled by on-chain crypto analytics firm Glassnode shows the past two days have seen consecutive all-time highs produced for net transfer volume of Bitcoin onto leading centralized exchange Binance. The data was shared by Twitter analyst William Clemente III to his 70,400 followers, triggering bearish price predictions on social media.

The chart indicates roughly 35,000 Bitcoin worth more than $1.4 billion has been deposited on Binance in the past 48 hours.

“Feels like capitulation,” said Kraken growth lead Dan Held. Clemente replied: “Let’s see one final nasty liquidation wick.”

Reasons to be cheerful

Despite Bitcoin’s price grinding down to post local lows below $40,000, some analysts are finding reasons to be bullish.

Popular analyst Lark Davis noted the recent downturn has pushed Bitcoin’s 14-day relative-strength indicator into oversold territory for the first time since March 2020, suggesting the crash may be nearing its plateau.

Others are welcoming capitulation as a likely catalyst for a bullish recovery, predicting a swift return to upward momentum once selling has become exhausted.

Twitter user YHRW80 noted surging flows into Bitcoin’s spot and derivatives markets during 2021, concluding that the dominant emotion gripping the markets is “greed” rather than fear.

However, Bitcoin’s Fear and Greed Index disagrees with YHRW80’s analysis, describing current Bitcoin market sentiment as “extreme fear.”

There was some welcome news today, with Indian media reporting the country’s government is set to rethink its planned crypto ban and form a new panel of experts to explore regulating crypto assets in India.

Some analysts suggest the catalyst for the surging inflows is tomorrow’s looming deadline for controversial stablecoin issuer Tether to disclose its quarterly financial records as part of its settlement with the New York Attorney General’s office.

Last week, Tether posted a breakdown of its reserves for the first time, asserting three-quarters of the assets backing its stablecoin are cash, cash equivalents, other short-term deposits and commercial paper.