Bitcoin Exchange inflows down to a 10-year low

Bitcoin exchange inflows have plummeted to a 10-year low, a surprising development given Bitcoin’s recent all-time high of $74,000. The current low inflows suggest that Bitcoin holders are not rushing to sell their assets, indicating a strong “HODLing” sentiment. Only about 8,400 BTC moved to exchanges recently, a stark contrast to higher historical levels when BTC was below $1,000.

One significant factor behind this trend is the rise in institutional interest and over-the-counter (OTC) trading. Institutional investors are increasingly driving market activity, as evidenced by record inflows into Bitcoin exchange-traded funds (ETFs). For instance, spot Bitcoin ETFs recently saw their highest single-day inflow, with over $1 billion pouring in, primarily from BlackRock’s iShares Bitcoin ETF​​.

The market dynamics have shifted significantly, with large holders, or “whales,” choosing to hold their Bitcoin rather than sell. This is reflected in the decreased inflows to exchanges and increased demand in OTC markets. Analysts suggest that this trend indicates strong future support for Bitcoin prices, as institutional investors continue to acquire significant amounts of BTC​​.

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And further to that, digital asset funds saw the fourth week in a row of outflows, totalling $251 million.

Source: Coinshares

This change in behaviour marks a notable shift from previous market cycles, where large price increases often led to higher exchange inflows as traders sought to realise profits. The current low inflow levels, despite record-high prices, suggest that the market could be heading towards a supply crunch, further driving up prices as demand continues to grow​.

Trump on crypto: “I’m Good with it”

Thought Trump was old news? Maybe not…

At a recent event for Trump NFT holders at Mar-a-Lago, former President Donald Trump expressed his positive stance on Bitcoin and crypto, stating he’s “good with” digital assets. As he does best, Trump took the opportunity to criticise President Joe Biden, claiming that Biden doesn’t understand digital currencies (which, to be fair, I think he’s right). 

Despite Bitcoin’s recent dip to around $60,000 from its previous high of over $70,000, Trump’s endorsement and potential Federal Reserve actions could ignite a massive $4 trillion Bitcoin price boom. This development comes amid concerns about the U.S. dollar’s stability, with prominent figures like Elon Musk warning of a potential collapse.

Trump highlighted the potential benefits and advancements brought about by crypto, contrasting it with Biden’s approach, which he described as outdated and lacking comprehension of the digital finance landscape​.

How Deep Are Your Pockets?

Imagine a descending channel as the market’s steady, where each low and high slopes downward like a slow slide into bearish territory. It’s like the market is stuck right now with sellers calling the shots and the price inching lower each day. How low does this downward spiral go?

Let’s analyse where we believe the price action might rebound and the bulls take control. $56,555 seems to be the bottom floor where the price had reacted before. If we do decide to fall that deep again, this could be a great bouncing level to watch out for where the liquidity is thick and buyers have lined up in the millions. We can also see a nice liquidity pool for traders at $60,000 for BTC which has 108 bitcoins ready to be purchased!

Source: Tensorcharts

But hey, don’t lose hope just yet! Despite its ugly appearance, this descending channel isn’t all doom and gloom. Savvy traders keep a lookout for glimmers of optimism within its confines. Look for signs like bullish divergence or a breakout above the upper trendline—they’re like rays of sunshine breaking through the clouds on a rainy day.

So, while the descending channel may seem like a one-way ticket to ‘down!’, there’s always room for surprises and opportunities in the world of trading. After all, even the darkest clouds have a silver lining!

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