Bullish Sentiment Drives Bitcoin Outflows from Exchanges
Cryptocurrency traders are optimistic as they end the year with another positive on-chain metric: over $1.1 billion net outflows from centralized exchanges. This indicates that Bitcoin bulls expect more highs in 2024.
On December 27, a record-breaking 28,000 BTC were transferred out of centralized exchanges, marking the largest Bitcoin exits in the past 12 months. This comes as Bitcoin hovers near $43,000, following significant gains driven by cooling inflationary measures and anticipation for a spot Bitcoin ETF approval by the SEC.
Holding Strategy Boosts Bullish Sentiment
Net outflows from exchanges typically indicate an upward sentiment, as traders prefer to hold their assets for longer periods. On the other hand, inflows to exchanges suggest potential selling. Coinbase recorded outflows of over 18,000 BTC, indicating that investors are taking a long-term approach to their cryptocurrency exposure.
Coinbase’s role as custodian for nine Bitcoin ETF applications in the US further supports this sentiment. The decreasing number of Bitcoins on exchanges, now at its lowest point since April 2018, reflects the asset’s strong fundamentals and upward movement going into the new year.
Bitcoin Inflows Driven by Institutional Products
The inflows into the Bitcoin market are primarily driven by institutional products that have surged due to anticipation for a spot ETF. Bitcoin has gained over 157% this year, recovering from losses recorded last year. In October, net outflows were observed when the price of Bitcoin touched $35,000 and were linked to the spot ETF drive.
Miners Reduce Holdings Ahead of Halving
While traders are bullish, BTC miners are reducing their asset holdings as the price approaches $43,000. This is a result of profitable mining operations following the bear cycle. On December 27, miners’ wallets saw a decrease of 700 BTC, indicating that they are taking profits and preparing for the upcoming halving in April.
Hot Take: Bullish Outlook for Bitcoin Continues
The positive on-chain metrics, with record outflows from exchanges and decreasing miner holdings, suggest a bullish outlook for Bitcoin. The anticipation for a spot Bitcoin ETF approval and strong institutional interest are driving the cryptocurrency’s growth. With Bitcoin’s price surpassing previous highs and gaining over 157% this year, it is poised for further success in 2024.
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