- Bitcoin’s latest outflow revives hopes for a long-term bullish trend.
- Assessing whether the market will shift from short-term profit-taking to long-term prospects.
With Bitcoin [BTC] With ETF approvals drawing closer, as well as Bitcoin’s next halving fast approaching, you can’t help but wonder when the next BTC rally will begin. The reality is that this may be sooner than expected.
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The reality of the market is that it is approaching a stage where Bitcoin holders may become impatient. This is because the market operates in a cycle and the last cycle was bearish. But even the bear market must eventually give way to the next bullish phase. 2024 is likely to be a bullish year given several factors that may align with demand shocks.
The bullish expectations could trigger a favorable response in terms of demand. Many traders will likely want to secure some BTC at discounted prices before more demand pushes the floor price up. Recent data suggested this may already be happening.
Bitmex just recorded the second highest Bitcoin outflows early this week. CryptoQuant analyst under the pseudonym Joaowedson made this statement in terms of development. This suggests that the outflows represent a footprint of institutional investors.
“This massive withdrawal of Bitcoin from Bitmex caught the attention of market observers because it signaled 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 profit-taking mood in the short term
While the recent surge in BTC outflows might give the impression that the long-term rally has begun, this could be another false positive. This is especially true if the cryptocurrency fails to support long-term demand. While the increase in Bitcoin currency inflows was observed, it is worth noting that the market also recorded an increase in currency inflows.
Source: CryptoQuant
The surge in currency inflows could have offset most of the buying pressure. This could explain why BTC has not sustained the same rally we saw on the day the surge was observed. Moreover, this could also mean that the selling pressure is still focused on short-term profit taking.
Read more about Bitcoin price prediction for 2024
The whale activity also showed something interesting regarding BTC’s current situation. Addresses holding more than 1,000 and 10,000 BTC have contributed to the selling pressure over the past four weeks.
Source: Glassnode
While short-term traders may still be active, the idea that Bitcoin is about to switch to a long-term focus was still active. BaroVirtualanother pseudonymous CryptoQuant analyst suggested that Bitcoin’s 5e A major bullish rally could begin within the next two months.