As a seasoned researcher with years of experience in tracking and analyzing cryptocurrency markets, I’ve seen my fair share of market swings and trends. The recent decline in Bitcoin (BTC) and Ethereum (ETH) whale transactions is an interesting development that warrants closer scrutiny.
In the midst of international economic instability, there’s been a significant drop in the number of large transactions involving Bitcoin (BTC) and Ethereum (ETH), often referred to as ‘whale’ transactions. This downward trend was identified by blockchain analytics firm Santiment, who pointed out that it began around mid-August. Investors and analysts are worried about the potential implications this trend might have on these digital assets.
Massive Drop in Bitcoin And Ethereum Whale Activity
Bitcoin transactions valued over $100,000, or so-called Bitcoin whale transfers, have decreased by approximately 33.6% since reaching their peak in March/April. However, it’s worth noting that these Bitcoin whales have been acquiring the coin more recently. Similarly, Ethereum whale transfers showed a drop of about 72.5% during the same period. According to Santiment analysis, this trend does not necessarily mean a bearish outlook.
From a different angle, Santiment pointed out that whales might be active in both bullish and bearish market conditions. However, it’s clear that significant players are generally patient, choosing to observe and strategize before making their next steps during periods of excessive market excitement (greed) or apprehension (fear).
Typically, the crypto community tends to respond strongly to moderate price fluctuations, particularly since Bitcoin reached a new record high of more than $73,000 six months ago. It seems that reaching the $70,000 level again could trigger widespread fear of missing out (FOMO), while a significant drop towards $45,000 might cause panic selling.
US CPI Data to Boost Crypto Market
At present, it appears that the large Bitcoin holders are showing a sense of optimism, possibly due to the recently revealed United States Consumer Price Index (CPI) figures. Today’s CPI data indicated a decrease in inflation, with the rate dropping to 2.6% in August, which was lower than anticipated market expectations.
It appears that the positive data outcomes have significantly improved market optimism. This development has strengthened wagers that the U.S. Federal Reserve may reduce interest rates in September. After the Labor Department’s announcement, the probability of a 25 basis points (bps) Fed rate cut skyrocketed to 85% from its initial 71%, as discussed at the central bank’s September meeting. Presently, market speculation leans towards a potential 100 bps interest rate reduction this year.
Bitcoin and Ethereum are currently experiencing losses, but there’s optimism that lowering interest rates will enhance their prospects. The U.S. election, despite not focusing on cryptocurrency during the Trump-Harris debate, could potentially boost crypto market sentiment, particularly if a pro-crypto candidate emerges victorious.
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2024-09-11 21:05