Bitcoin price whales increase, but BTC sent to crypto exchanges continues to fall. What does the trend mean?

Good morning. Here’s what happens:

Prices: Jobs and services reports sent bitcoin plunging below $30K before, though the crypto later regained that threshold. Sentiment has become increasingly bullish, one market observer wrote to CoinDesk.

Insight: Large bitcoin holders are increasing, but BTC sent to exchanges is decreasing. Is the trend bullish?

A Bitcoin breakout from recent bullishness

Crypto investors took more from an unexpectedly fiery ADP private sector jobs report and surprisingly robust ISM Services Index than a softer job opening survey.

They sent bitcoin falling below $30,000 for the first time in nearly two weeks. The largest cryptocurrency by market capitalization had recently rebounded to $30,1[ads1]00, down 1.3% in the last 24 hours. The decline followed just hours after bitcoin hit a new three-month high above $31,500, a continuation of investor bullishness stemming from several spot bitbit ETF filings last month.

Markets have become increasingly hopeful that the US Securities and Exchange Commission (SEC) will reverse its pattern of rejecting the applications of some of the world’s most prominent financial services firms. But on Thursday, worries about economic growth, a precursor to inflation, trumped any euphoria.

Ether followed a similarly downtrodden path, dropping quickly from a high above $1,950 after the ADP report, which showed the private sector added 497,000 jobs, more than double forecasts. The ISM Services Index rose to 53.9 in June, higher than the consensus estimate of 51.2 and May’s 50.3. The reports provide fresh fuel for the US central bank to justify further interest rate cuts in its quest to tame inflation. Such hawkishness has often weighed heavily on crypto and other asset markets, fretting that the Federal Reserve will plunge the economy into a steep recession.

Investors were less impressed by May’s Job Openings and Labor Turnover Survey (JOLTS) report, which showed job vacancies falling to 9.82 million, down from an upwardly revised 10.3 million in April.

ETH, the second largest crypto by market cap, recently changed hands at $1,853, down 3.1% from the same time on Wednesday. Most other major cryptos plunged deep into the red before regaining some ground. Litecoin and popular memecoin SHIB were still lower than 6% and 3% respectively. SOL, the symbol of the Solana blockchain, rose over 11% at one point and was still up more than 4%. The CoinDesk Market Index, a measure of the crypto markets’ overall performance, was recently down 1.7%.

Stock markets in Asia were down in early trade, with the Hang Seng and Nikkei down around 1% and 0.5% respectively. They followed the decline in US indices with the tech-focused Nasdaq and S&P 500 both down 0.8%. Meanwhile, yields on both 2- and 10-year US Treasuries rose, and safe-haven gold rose.

In an email to CoinDesk early Thursday, Richard Mico, US CEO of Banxa, a provider of crypto payment and compliance infrastructure, noted bitcoin’s $30,000 support amid spot BTC applications and a host of positive signals, technical and otherwise.

“We may still have a rate hike or two ahead of us, but the Federal Reserve certainly appears to be nearing peak interest rates if it hasn’t already been reached,” Mico wrote. “We’ll probably have to wait until next year’s Bitcoin halving to experience full-on bull mode, but we’re getting closer every day, and many are keen to get ahead of what they expect will be a continued uptrend.”

He added: “The market reflects an increasingly optimistic sentiment and the next 18 months are going to be very exciting.”

Whale activity a bullish signal?

Despite a recent surge in bitcoin whales, large BTC holders remain reluctant to move assets further to centralized exchanges, Glassnode data shows.

Bitcoin whales and whales moving assets to exchanges have gone their separate ways, as big investors seem wary of moving their assets out of cold storage.

Bitcoin investors are likely wary of currency risk, regulatory hurdles, or a combination of the two.

The combination of major entities having increasing bitcoin supplies and a decreasing supply to exchanges indicates bullishness among investors.

This article was written and edited by CoinDesk journalists for the sole purpose of informing the reader with accurate information. If you click on a link from Glassnode, CoinDesk may earn a commission. For more, see our Ethics policy.

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