- Bitcoin’s latest exchange outflows reignite hopes of a long-term bullish trend.
- Assessing whether the market will shift from short-term profit-taking to a long-term outlook.
With Bitcoin [BTC] ETF approvals getting closer as well as the fast-approaching next Bitcoin halving, one can’t help but wonder when the next BTC rally will start. The reality is that it could be sooner than expected.
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The reality of the market is that it is approaching a stage where Bitcoin holders might start getting impatient. This is because the market operates in a cycle and the latest cycle has been bearish. But even the bear market eventually has to give way to the next bullish phase. 2024 will likely be a bullish year considering multiple factors that may align with demand shocks.
The bullish expectations could trigger a favorable reaction as far as demand is concerned. Many traders will likely want to secure some BTC at discounted prices before more demand raises its floor price. Recent data suggested that it might already be taking place.
Bitmex just registered its second-highest Bitcoin outflows at the start of this week. CryptoQuant analyst under the pseudonym Joaowedson made this statement regarding the development. Thus, suggesting that the outflows represent an institutional investor footprint.
“This massive withdrawal of Bitcoin from Bitmex caught the attention of market observers as it indicated a significant shift in the landscape. Transactions of Bitcoin in such substantial volumes are often associated with large financial institutions and institutional investors.”
The market could still be in a short-term profit-taking mood
While the recent surge in BTC outflows could give the impression that the long-term rally has begun, it could be another false positive. This is especially true if the cryptocurrency fails to sustain long-term demand. While the surge in Bitcoin’s exchange flow was observed, it is worth noting that the market also registered an uptick in exchange inflows.
Source: CryptoQuant
The surge in exchange inflows could have canceled out most of the buying pressure. This may explain why BTC has not sustained the same rally that we observed on the day that the surge was observed. Furthermore, this could also mean that sell pressure might still be oriented toward short-term profit-taking.
Read about Bitcoin’s price prediction for 2024
Whale activity also showed something interesting regarding BTC’s current situation. Addresses holding over 1,000 and 10,000 BTC have been contributing to sell pressure in the last four weeks.
Source: Glassnode
While short-term traders might still be active, the idea that Bitcoin is about to switch to a long-term focus was still active. BaroVirtual, another pseudonymous CryptoQuant analyst suggested that Bitcoin’s 5th major bullish rally could start within the next two months.