Binance Reports Nine Straight Days of Bitcoin Withdrawals - Could Investors be Anticipating FOMC Decisions?
In the world of cryptocurrencies, the past few weeks have been marked by significant events. Binance, one of the leading crypto exchanges, has experienced outflows for nine consecutive days, from September 6 to 14. This trend is particularly noticeable in the case of Bitcoin (BTC), with the average deposit of BTC to exchanges reducing by 50% compared to July figures.
The average Bitcoin inflow to all exchanges has hit a one-year low of 25,000, suggesting that investors are moving their assets away from crypto exchanges in anticipation of the Federal Open Market Committee (FOMC) meeting, which commenced on Tuesday. Coins leaving exchanges typically signal a rise in buying pressure, and analysts believe the trend of outflows has significantly contributed to bitcoin's bounce from $108,000.
The FOMC meeting could influence the price trajectory of cryptocurrencies and other risk assets in the coming months. The Federal Reserve is anticipated to cut interest rates during the meeting, making borrowing cheaper for American consumers, who would then have access to more liquidity. This could potentially drive capital into risk assets like Bitcoin, equities, and precious metals like gold and silver.
Binance's outflows are not the only trend shaping the crypto market. Since BTC hit a low of $107,500 two weeks ago, it has recovered and reclaimed the $117,000 level. Analysts predict that BTC will experience its final leg of this bull run over the next three to four months.
The movement of coins to and from exchanges has played a significant role in influencing bitcoin's price fluctuations, according to CryptoQuant analysts. However, the main crypto trading platforms influencing Bitcoin outflows in the past nine days are U.S. spot Bitcoin ETFs, which saw significant outflows, while Ethereum-related products attracted more demand and inflows.
This rotation is seen as potentially positive for Bitcoin mid-term because liquidity is still active in the market, and despite current outflows, Bitcoin remains the base asset, with fundamentals intact and traders hedging risk strategically. The shift in capital from Bitcoin to Ethereum is attributed to the growing ecosystem, staking options, and perceived long-term value of Ethereum.
If September does not experience a surge, October, which marks the beginning of the fourth quarter, has historically been seasonally positive for BTC. This could signal a promising future for the cryptocurrency market, especially as we approach the end of the year.
While the market remains volatile, the outlook for Bitcoin and other cryptocurrencies continues to be a topic of interest for investors and analysts alike. Stay tuned for more updates as the FOMC meeting unfolds and its implications on the crypto market become clearer.
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