Bitcoin may have room to run in its stellar 2023 rally if flows between cryptocurrency exchanges and personal digital wallets are any guide, according to strategists at Bank of America Corp.
net of $368 million Bitcoin Strategists Alkesh Shah and Andrew Moss wrote in a note sent to individual wallets in the week through April 4 that the period saw the second-highest net bitcoin outflow from crypto exchanges this year.
,investors When they intend to hold (or HODL) them, they move tokens from exchange wallets to their personal wallets, indicating a possible reduction in selling pressure. Tokens for the long term.
Strategists at BOFA wrote in a note published Monday that concerns stemming from a US regulatory crackdown on digital-asset platforms may have accelerated flows from exchanges.
Bitcoin’s year-to-date surge has outperformed major asset classes and sparked a thorny debate over why the biggest coin is rallying from a rout in 2022.
Some analysts argue that expectations of an eventual Federal Reserve interest rate cut are fueling risky investments like crypto. Other theories – often disputed – include the coin’s purported ability to ease stress in the banking sector or hedge inflation as a type of digital gold.
big week
This week bitcoin climbed above $30,000 for the first time since June 2022. The token is up more than 80% since December 31, outpacing the Nasdaq 100 Tech Index’s 19% gain. Gold has climbed almost 9%.
Digital tokens are set to boom in 2023 despite aggressive action by US regulators following the collapse of FTX and other crypto organizations. The rally comes amid a drop in crypto market liquidity and trading volume following the bankruptcies.
“I am looking for bitcoin to move towards the $33,000 level before any meaningful technical correction,” said Nathan Batchelor, managing partner at analytics platform Beyond Trader. A strong buyers’ market.”
Traders are waiting for another signal to confirm bitcoin’s breakout, according to Gary Krugljako, founder of 0VIX, an open-source protocol for lending and borrowing in blockchain-based decentralized finance, or DeFi.
inflation print
He said economic data due this week could provide that signal, particularly Wednesday’s US consumer price index. The average estimate in a Bloomberg News poll calls for a 5.1% jump in March from a year earlier.
“Anything below 5.2% or around 5.2% could continue to be bullish for bitcoin,” Krugljako said.
Unlike bitcoin, the net inflow of ether into crypto exchanges in the week through April 4 was the largest in 2023, according to BOFA. This is ahead of the biggest software upgrade to the Ethereum blockchain since last year’s merge.
The so-called Shanghai upgrade is the culmination of years of long work to change the way Ethereum operates. While BOFA strategists do not expect the event to directly trigger selling pressure, they expect increased volatility around the change due to reduced liquidity, exchange flows and derivatives activity.
Ether, the largest coin after bitcoin, is up about 55% so far this year, roughly in line with the gauge of the top 100 digital assets. Ether fell 1.7% to $1,863 as of 11:20 a.m. ET in Tokyo on Wednesday, while bitcoin fell less than 1% to around $30,000.
The text of this story is published from a wire agency feed without any modification. Only the headline has been changed.
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