Bank of America analysts point to bullish signals for bitcoin
Increased outflows of cryptocurrencies from exchanges and the growth of net inflows into stabelcoins signal a bullish market momentum. This is the conclusion reached by analysts at Bank of America, writes Decrypt.
The experts noted a “loosening of seller pressure” as the initiative shifted to buyers of digital assets. As a result, from June 29 to July 26, market capitalization increased by 11%, reducing the rate of decline from the beginning of the year to 56%.
“Limited supply and continuous outflows from exchanges indicate that investors continue to hold positions amid a rally in risky assets,” the report said.
Experts pointed to the stability of the trend despite the Fed’s key rate hike of 0.75% at once.
Analysts estimated the volume of bitcoins withdrawn from cryptocurrency platforms to cold wallets at ~$508 million, Ethereum – at ~$381 million (data provided from July 2 to August 1). The first asset increased in value by 19% during this period, the second – by 56%.
In Stablecoin, inflows and outflows alternated. The most notable surge in withdrawals to non-custodial wallets of $437 million occurred in late June and early July.
“The outflow of ‘stable coins’ from exchanges to personal wallets occurs when investors seek to preserve the dollar value of their assets. This is often true during periods of declining digital asset prices. When investors want to expand their risk appetites, they usually seek to use stablecoins to buy cryptocurrencies,” experts explained.
Recall, Glassnode doubted the continuation of the bitcoin recovery rally.
Earlier, the organization’s experts warned that it would take more time for the bitcoin price to turn around.