As bitcoin (BTC) surges to $42,000 and beyond, trading above $43,000 at the time of writing, the major cryptocurrency by market cap saw more than 15,000 BTC in outflows from exchanges earlier this week. It is the largest outflow from stock markets since January 29, according to data from crypto analysts IntoTheBlock.
This is a positive sign for bitcoin price action, as assets taken off the exchanges and likely to be transferred to cold storage are less likely to be sold in the short to medium term. The last time BTC experienced a major outflow, it was followed by a sharp rise in price.
Largest amount of ether extracted from Exchanges in 2022
Not only is bitcoin being transferred from exchanges in large quantities, ether, the second-largest cryptocurrency by market capitalization, saw another large outflow from exchanges on Wednesday. According to InteTheBlock, this was the largest amount of ether withdrawn from Exchanges in 2022, as more than 180,000 ETH was withdrawn from centralized exchanges in one day. ETH reserves on centralized exchanges declined rapidly in 2022, standing at over 1.08 million.
According to crypto on-chain analysts Santiment, ether enjoyed One leg up again on Wednesday, leaping over $3,000 after yesterday’s first breach above this resistance level in three weeks. Traders shorting ether piled up after the breakout above USD 3,000, immediately leading to numerous ether liquidations.
Overall, the past week has been a sea of green for crypto after the US Federal Open Market Committee (FOMC) announced a rate hike in the US Federal Reserve rate that everyone was expecting. The unsurprising 25 basis point rise in interest rates has left most markets in the green. Crypto market prices are still moving along with stocks, but there are signs of less correlation, according to Santiment.
Bitcoin prices have now been consolidated between $38,000 and $45,000 for over two months, and a large number of BTC has changed hands over this period, as per data from on-chain analysts Glassnode. Newer buyers (short-term holders) have rallied strongly in this range, while many long-term holders are holding coins at a loss. This means that both categories have an incentive to continue.
Data showing short and long term investments. Image by Glassnode.
Bitcoin breaks out of the bleak trend
At the time of writing, bitcoin (BTC) is trading at $43,200, up 2% in the past 24 hours and up 4.8% in the week. Since its all-time high of $60,044 on November 10, bitcoin is still 37.7% lower. However, the major cryptocurrency has seen an upward trend in the past month and the price is up 16.4% in the past 30 days, breaking the bleak trend since the beginning of the year.
Ethereum has seen a major surge in social discourse in recent weeks, especially regarding The Merge which is likely to take place in June. However, it is difficult to say whether the event has been priced in. Some skeptics about whether the proof-of-stake transition will work remain. However, according to Ethereum’s core developers, all major hurdles have been cleared and the merger is good to go after a period of final testing of the Kiln testnet.
At the time of writing, ether (ETH) is trading at $3,050, up 1.9% over the past day and up 10.1% over the week. Zooming out, ether is up 19.3% in a month and 83.5% in a year. Since its all-time high of $4,878 on November 10 last year, ether is still 37.3% lower.
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