Bank of America strategists predict that bitcoin’s phenomenal rise, which took it from around $17,000 in early 2023 to $30,000 today, may not be over.
According to Bloomberg, strategists have recently assessed bullish trends based on transfers between cryptocurrency exchanges and individual wallets.
Bank of America analysis based on Bitcoin outflows from exchanges
In the week ending April 4, a net $368 million worth of bitcoins were transferred to individual wallets, according to a note by BofA’s Alkesh Shah and Andrew Moss. They emphasize that when investors plan to hold their coins, they move them from exchange wallets to personal wallets, reducing potential selling pressure.
Outflows from exchanges have been fueled by concerns about a US regulatory crackdown on digital-asset platforms, according to bank strategists.
The weekly statistics tell a different story. For the week ending April 7, CoinShares’ digital asset fund flow report reported inflows of $57 million. Analysis indicates a low volume week; However, the sentiment was favorable. Interestingly, BTC dominated 98% of all flows with $56 million.
However, there are macro factors to look out for that could affect the value of crypto assets in 2023. Some economists claim that risky investments may benefit from forecasts of future Federal Reserve interest rate cuts. And Bitcoin could be a potential beneficiary when the banking crisis recently rocked traditional markets.
As of April 10, Bitcoin traded above $29,000 before breaching the crucial $30,000 threshold. It remained near the critical level until Thursday. BTC’s value has increased by 24% in a month, although it has lost more than a quarter of its value over the previous year. Nevertheless, Bitcoin’s price is still 56% below the all-time high of $69,000, reached in November 2021.
How Macro Factors Can Affect BTC
The most recent and biggest market event is Ethereum’s Shapella upgrade. It was recently edited and is the biggest upgrade since the merger. BofA strategists predict increased volatility due to significant market events that enabled staked ETH withdrawals.
However, while they do not expect the event to trigger direct selling pressure, they do expect more volatility due to reduced liquidity, derivative activity and exchange flows.
Meanwhile, on-chain indicators are bullish at the time of writing. According to IntoTheBlock, 2% of bitcoin owners are broke at current prices, while 74% are ‘in the money’. The density parameter is also positive, implying that whales and investors are increasing their positions.
Most importantly, Bitcoin is about a year away from its next “halving.” The estimated date for Bitcoin’s halving, which occurs roughly every four years, is April 2024. Additionally, the period leading up to the event has generally booked a positive trend for BTC.
Vijay Iyer, Luno’s vice president of corporate development, told CNBC that a cyclical “bottom” is developing ahead of bitcoin’s halving.
Jamie Sly, a CryptoCompare analyst, claimed that the exact timing and amount of revenue after the halving could change, as it appears that investors accumulate bitcoins frequently.
Sly considers a 500-day accumulation period before Bitcoin halving. According to the analyst, this would indicate that we are only 142 days into the current cycle. This is considering that the market bottomed out in November 2022 when BTC hit $15,760.
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