Nearly $3 Billion Moved Off Exchanges, But There’s Still Substantial Selling Pressure
There were about $3 billion worth of bitcoins removed The price of the first cryptocurrency soared to $39,000 by traders on various centralized exchanges as the Fed left the country’s key rate unchanged.
But as some traders and investors feel relieved as bitcoin approaches nearly $40,000, the presence of additional financial risks on the market and Jerome Powell’s rhetoric about inflation and monetary policy pushed the first cryptocurrency down to $36,000.
As Powell suggested, inflation in the US could propel the market over the next few months, which is why the regulator will take action in the first half of the year. The 16th chairman of the Federal Reserve said the regulator is expecting the first rate hike in March.
In general, the meeting was considered risky for the market; Hence, it affected bitcoin, which is considered a risk asset, in a negative way.
Why are traders withdrawing their coins?
While large outflows from exchanges are the prerogative of a bear market, large investors and institutions can actually use exchanges to hoard an additional amount of cryptocurrency while trading at a discount.
Daily on-chain exchange flow#bitcoin $BTC
— glassnode alerts (@glassnodealerts) January 27, 2022
️ $1.7B in
️ $2.9B out
Net Flow: -$1.2B#ethereum $ETH
️ $919.5M inches
️ $732.0M out
Net Flow: +$187.5M#tether (ERC20) $USDT
️ $925.1M inches
️ $791.8M out
Net Flow: +$133.3Mhttps://t.co/dk2HbGwhVw
As previously reported by U.Today, an unnamed whale bought around 500 BTC during the market crash. The same whale also held about 125,000 BTC in its balance. Such large sums are usually kept in a cold wallet for added security.
But while nearly $3 billion worth of cryptocurrencies were moved from exchanges, there is still a lot of selling pressure on the market that actively drags bitcoin down.
At press time, bitcoin is trading at $36,268 and is losing 1.5% of its previously gained value. The cryptocurrency has also lost around 7% of its value since the local high.