Exchange Outflows Grow: Good Signs on the Horizon?
Bitcoin Regains Control of $57K – Top of the Channel Next?
Bitcoin holders have been making waves, moving an impressive $750 million worth of the cryptocurrency out of exchanges in a single day. This marks the largest Bitcoin exodus since May, leaving exchanges with noticeably lighter digital wallets.
What’s driving this trend? Bitcoin’s recent performance might have something to do with it. The flagship crypto has been on a bullish run since the dip into $52,000 territory, surpassing $57,000 and even touching $58,000. It seems investors are keen to secure their assets, perhaps anticipating further gains.
Historically, such outflows are indicative of future price increases, while inflows warn that a drop is about to happen. That’s because people send their coins to an exchange (inflows) when they are planning to sell. If they don’t want to sell, there’s no need to keep their assets on an exchange, which is less secure than a private (cold or hardware) wallet. On the other hand, when they plan on holding on to their assets, they withdraw from exchanges (outflows).
Earlier this year, massive outflows were followed soon after by a jump from just under $68,000 to $72,000 in a matter of days. Large inflows have sometimes led to price declines, as seen in the turbulence of late July and early August.
Coinbase’s cbBTC: Backed 1-to-1 By Bitcoin Holdings
In other news, Coinbase has introduced cbBTC, a wrapped version of Bitcoin designed to bridge the gap between Bitcoin and the world of decentralized finance (DeFi). This new wrapped coin allows Bitcoin holders to participate in various DeFi applications on Ethereum and Base networks without converting their assets.
The launch of cbBTC opens up new possibilities for Bitcoin users. They can now engage with decentralized exchanges, lending platforms, and dapps using their Bitcoin holdings. Considering that Bitcoin currently lacks this functionality, this new addition by Coinbase could bridge the gap and make BTC more appealing.
Coinbase is backing each cbBTC 1:1 with Bitcoin held in their custody. This approach aims to provide a reliable tool for accessing decentralized applications. It basically makes Bitcoin usable in more ways than the classic peer-to-peer cryptocurrency. Al launch, cbBTC will be supported on Uniswap, Aave, Compound, and Curve.
Chart Analysis – BTC/USD
At the time of writing, Bitcoin is changing hands at $57,950 after a dip that saw it go as low as $52,546. The recovery broke through the resistance at $57,000 and it looks like the pair is now headed towards the 50-day Moving Average.
Overall, we can clearly see lower highs and lower lows on the chart, which is the staple of a downtrend but the dip we talked about earlier, created the first higher low in a while. This may be an early indication that the trend is about to change and it will be partially confirmed by a break above the 50 MA.
If the bulls can take BTC above the moving average, the next target will likely be the upper side of the descending channel which has been containing the pair since the ATH reached in March of this year. Keep in mind that the Fed will announce the interest rate next week, which will surely affect the US Dollar and consequently the BTC/USD pair.
