Bitcoin retests $20,000 despite record outflows from crypto exchanges 📉

Cryptocurrencies wiped out much of the bullish momentum at the end of the week, after US megatechs reported weak financial results contributing to the index pullback. At the same time, record amounts of bitcoins are being withdrawn from the balances of cryptocurrency exchanges:

  • Historically, the phenomenon of Bitcoin disappearing from exchanges has been a positive harbinger, signaling a reluctance to sell by “whales” who withdraw tokens to external wallets. Did Buyers Really Believe in the Bitcoin Bottom?

A record 55,000 BTC, worth around $1.1 billion, was withdrawn from the world’s largest cryptocurrency exchange, Binance. The amount represents the largest outflow in the history of the exchange. The magnitude of the outflows exceeded the June low, when bitcoin was at $17,600, and the March 2020 crash. Source: CryptoQuant

1666964883 728 Bitcoin retests 20000 despite record outflows from cryptoThe magnitude of Bitcoin outflows from cryptocurrency exchanges did not apply solely to Binance, which may be just a “one false signal” of the whale movement. Average outflows from all cryptocurrency exchanges on October 25 and 26 approached June highs of nearly 23,000 BTC. Bitcoin broke out of consolidation, similar to the November 2020 bullish move. The total amount of BTC leaving the exchange in recent days is already approaching 71,600 BTC, with over 94,000 BTC liquidated from the FX derivatives balance. Such a magnitude of BTC contract liquidation in the past heralded a drop in supply pressure. Source: CryptoQuant

  • The cryptocurrency market is still uncertain about the future movement of cryptocurrencies in the face of a lackluster earnings season for tech companies in the United States and the Fed’s upcoming interest rate decision, which could rise. again bury the market’s hopes of a quick pivot. Some cryptocurrency analysts are pointing out that the observed breakout was a “fake-out” and markets could again be “punished” by the Federal Reserve’s hawkish narrative;
  • However, the hope for a pivot is real in the long term. Wall Street has been told of a “dovish outlook” from analysts at the BlackRock fund, who reportedly pointed to Jerome Powell’s “dovish tone” as early as Wednesday’s next meeting and expect lower rate hikes at from December;

Ethereum is defending itself around $1,490, while Bitcoin is trying to maintain the psychological threshold of $20,000. The worst performers were altcoins, some of which saw declines of 3% and 4% ahead of the weekend.

1666964884 369 Bitcoin retests 20000 despite record outflows from crypto

Chart Bitcoin, interval D1. The price of the largest cryptocurrency has moved in a descending triangle formation. Bitcoin surprised the bears with an upside reaction, however, it is still too early to trumpet a change in trend. The 50 moving average (black line) has increased slightly, but the intersection with the 200 SMA (in red) is still far away. If the averages maintain the current momentum, the intersection could take place around $22,500, signaling a likely change in trend to an uptrend following a golden cross. Historically, trend changes for bitcoin have always been accompanied by an intersection of these two moving averages. The main support is around $20,000 and the levels at $19,600 where the SMA50 is located. A drop below them could signal strong supply pressure and “expose” a potential false breakout. Source: xStation5

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Bitcoin retests $20,000 despite record outflows from crypto exchanges 📉

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