Market volatility has become a constant companion for traders and investors. Recent trends have shown a significant increase in the inflow of Bitcoin to various exchanges following a significant market correction and long-liquidation. This movement is often associated with a potential sell-off or a sign of uncertainty among holders. This has raised eyebrows in the market for further declines; however, rising USDT on exchanges shows a bullish sign.
Bitcoin’s Recent Surge On Exchanges
This year has seen a marked decrease in the amount of Bitcoin (BTC) stored on cryptocurrency exchanges. However, following the recent decline in Bitcoin’s price from the $44K high to a low of $40K, there’s a surge in inflow in exchange reserves. The total amount of Bitcoin held on exchanges is slightly over two million, specifically 2,035,804 BTC, according to data from Cryptoquant.com. This indicates that Bitcoin’s presence on exchanges has consistently remained above the two million level after 5 December. Additionally, over the last two days, there has been a notable increase, with 16K BTC moving into centralized cryptocurrency exchanges.
Binance, a leading cryptocurrency exchange, accounted for a significant portion of this movement, holding 525K Bitcoin. This forms a large chunk of the total inflow. Additionally, since December 3, 2023, Bitfinex has seen an increase of about 9,000 BTC.
Over $180 million were wiped out from crypto futures traders due to liquidations, as another volatility hit the market in the past 24 hours, significantly affecting those with highly leveraged positions. Major cryptocurrencies saw sharp declines, with some plummeting by up to 12%. Bitcoin (BTC) experienced a turbulent swing, fluctuating from $43,000 down to $40,300, according to recent data. This downturn was mirrored across key tokens like Chainlink (LINK), Cardano’s ADA, and Solana’s SOL, each of which saw over a 7% drop before experiencing a minor rebound.
Approximately $60.7 million worth of positions were liquidated for Bitcoin. Over $42 million worth of long-positions were liquidated, which are bets on rising prices, and $18 million in short positions, bets on declining prices, incurred losses in the midst of a broad scale unwinding of leveraged bets. This occurred as high funding rates created a volatile and unstable market environment. Top of Form
The Rise Of Tether On Exchanges
Tether (USDT), recognized as the biggest stablecoin in terms of market capitalization, has experienced a notable increase in its reserves held on exchanges. According to Santiment, a leading provider of cryptocurrency data, the total reserve amount of Tether has climbed, signaling a bullish hope. Over the past six months, there has been a 6.9% surge in the amount of Tether available on trading platforms. This movement is significant because Tether is often used by traders to hedge against volatility and to position themselves for potential purchases in the cryptocurrency market.
The increase in Tether’s availability on exchanges could be seen as a bullish signal. It suggests that investors are holding onto their Tether, ready to buy into other cryptocurrencies like Bitcoin if and when they see favorable market conditions. This behavior indicates that there’s a sense of buying among a segment of the market participants, who seem to be waiting for the right moment to re-enter the market, potentially driving prices up.
At its upcoming meeting on 13 December, the FOMC is expected to maintain interest rates at 5.25-5.50%. While there were earlier expectations of further increases, the current market consensus suggests that rate hikes may have concluded. The primary focus is now on when the Fed might begin reducing rates, with some predictions pointing to as early as May 2024.
However, the Fed is likely to be cautious in signaling such moves, mindful of continuous inflation concerns. The December meeting will be closely watched for any indications of potential rate cuts, even though inflation is projected to stay above the 2% target until at least 2025. While this may not directly affect the crypto market, any signals of rate cuts could lead to a shift towards a more dovish monetary policy. Lower interest rates typically decrease the attractiveness of yield-bearing assets, potentially making riskier investments like cryptocurrencies more appealing.
