The bullish case for Bitcoin (BTC) rallying to $40,000 and beyond by the end of the year is gaining strength as data from Glassnode reveals a significant outflow of coins from centralized exchanges.
Since Nov. 17, over 37,000 BTC, valued at $1.4 billion, has been withdrawn from exchanges, indicating a trend of investors opting for direct custody of their coins.
This outflow is likely driven by a preference for long-term holding, reflecting strong demand and diminishing sell-side pressure in the market. Additionally, the anticipated launch of a spot exchange-traded fund (ETF) in the U.S. has sparked euphoria among investors.
Historically, exchange outflows have heralded local price lows, reinforcing expectations of a medium-term price surge.
Bitcoin surged above the $38,000 mark on Friday, leading to gains across the broader crypto market, with major tokens recording up to 5% increases in the past 24 hours.
The overall market capitalization has risen to $1.5 trillion, a level last seen in May 2022, adding approximately $400 billion since the beginning of October.
Market analysts suggest that anticipated interest rate cuts by central banks in the coming months could attract more capital to markets, increasing volatility in speculative markets like cryptocurrencies.
“The Federal Reserve has paused its rate hiking cycle, and central banks globally are following suit,” stated Anthony Rousseau, head of brokerage at TradeStation. “It’s plausible to believe we have reached the peak of this tightening cycle. To support significant bullish activity, we will need to see positive liquidity in the markets.”
Bitcoin’s momentum increased after Federal Reserve governor Chris Waller hinted at potential rate cuts, citing a slowdown in the economy and moderation in inflation as indicators that current policies are appropriately positioned.
Interest rate decisions often have a considerable impact on the markets, with higher rates typically leading to a decline in risk assets like stocks and cryptocurrencies as investors may shift their focus to bonds.
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