The world’s largest cryptocurrency Bitcoin (BTC) has registered a new high for the year 2023 making a move closer to $40,000. At press time, Bitcoin is trading 1.9% up at $38,919 with a market cap of $761 billion.
Fed Hints At No More Rate Hikes Ahead
On Friday, Federal Reserve Chairman Jerome Powell hinted that there won’t be any future rate hikes. This comes on the sidelines of healthy economic data and slowing inflation in the US. This has further cleared the path for the Bitcoin (BTC) price to reach $40,000, with some analysts expecting it to happen very soon. Additionally, a Matrixport report also suggests that the Bitcoin price can hit $60,000 before the next Bitcoin halving in April 2024.
On-chain data provider Santiment reported that in response to Federal Reserve Chairman Jerome Powell’s announcement of maintaining current interest rates, Bitcoin (BTC) nearly reached the $39,000 mark. The heightened focus on Bitcoin, rather than alternative cryptocurrencies (altcoins), suggests a prevailing sense of fear in the market—an element often associated with sustained price increases.
Courtesy: Santiment
However, amid the current macroeconomic scenario in the US and across the globe, veteran investors like Robert Kiyosaki have been advising investors to accumulate Bitcoin as a hedge to the looming recession in 2024.
Additionally, several market analysts are already predicting interest rate cuts to begin in the first half of 2024. But during his Friday speech, Powell warned against it stating: “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so.”
Bitcoins Moving Off Exchanges
According to Glassnode data, over 37,000 BTC, valued at $1.4 billion, has been withdrawn from exchanges since November 17, indicating a trend of investors opting for direct custody of their coins.
This outflow suggests a preference for a long-term holding strategy, with some potential influence from Binance’s recent guilty plea. The inclination towards holding implies robust demand and diminishing sell-side pressure, particularly as excitement builds around the anticipated launch of a spot exchange-traded fund (ETF) in the United States.
Courtesy: Glassnode
Historically, exchange outflows have coincided with local price lows, aligning with expectations of a medium-term price increase.
The momentum for Bitcoin gained traction late Tuesday following remarks by Federal Reserve Governor Chris Waller, who noted that recent data indicated an economic slowdown. He suggested that the appropriate positioning of policies shall contribute to positive sentiment around Bitcoin.
