Bitcoin price could rise as exchange reserves hit 2024 lows

crypto.news · 2024-08-29T07:34:16+00:00

Bitcoin ETFs suffered consecutive days of outflows totaling over $105 million, yet the currency held steady above $60,000. Bitcoin may be buoyed by its decline in exchange reserves, combined with a falling US dollar and rising public debt, make it an increasingly attractive alternative investment, particularly as liquidity continues to climb. Trends in the options market also suggest a potential for Bitcoin to rise above $90,000 later this year.

crypto.news

2024-08-29 07:34:16

Abstract generation in progress

Bitcoin price held steady above $60,000 on Thursday, Aug. 29, even as its exchange-traded funds saw two consecutive days of outflows.

Data from SoSoValue shows that Bitcoin (BTC) ETFs lost $105.19 million in assets on Wednesday after shedding $127 million the previous day. These funds have accumulated $17.85 billion in assets, with most of the money coming from institutional investors.

Bitcoin has several catalysts that could push it higher in the long term, as was reported earlier this week

Another potential catalyst is that the amount of coins held in exchanges has dropped to the lowest point this year. According to CoinGlass, exchanges held 2.38 million coins on Aug. 29, down from 2.4 million in Aug. 27 and last month’s high of 2.50 million

Bitcoin reserves in exchanges | Source: CoinGlassFalling Bitcoin reserves often indicate low liquidity in the market and suggest that most investors are no longer moving their coins from wallets to exchanges, a key step in liquidation. For example, Bitcoin reserves surged in July when the German government liquidated its reserves.

The falling US dollar and growing US public debt are other potential catalysts for Bitcoin. The US dollar index, which measures the price of the greenback against a basket of currencies like the euro, pound, and Swiss franc, fell to $101.50, down over 4.7% from its highest level this year. The US dollar has pulled back after Federal Reserve chief Jerome Powell hinted at possible rate cuts in the September meeting.

The US dollar has pulled back after the Federal Reserve chair hinted that the bank will start cutting rates in its September meeting

Additionally, the US public debt has continued rising and is moving to unsustainable levels, making Bitcoin a viable alternative. Data by US Debt Clock shows that the national debt jumped to over $35.2 trillion, or 123.2% of the GDP. Annual interest on this debt has jumped to over $920 billion

The same trend is occurring globally, with liquidity reaching a record high of $95 trillion. As a result, more institutions and retail investors may turn to alternatives, first to gold, and then to Bitcoin.

Meanwhile, the options market is pointing to a potential Bitcoin rebound, potentially to $90,000 later this year. Additionally, Bitcoin funding rate has dropped to -0.0011%, pointing to more upside.

BTC4,12%

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.