Bitcoin has experienced its largest exchange withdrawal since the collapse of FTX, with over 47,000 BTC leaving exchange reserves.
While some of this movement could be attributed to internal reclassification by exchanges, it may also indicate accumulation by large players securing Bitcoin for long-term holdings.
Although these withdrawals do not create an immediate “supply shock” in Bitcoin’s price, they signal a growing trend of accumulation by institutional investors and whales.
Bitcoin Struggles Below $100,000 as Market Awaits a Breakout
Bitcoin has remained below $100,000 since the beginning of February and is currently trading at $96,920, marking a 7% decline over the past week. However, recent macroeconomic developments suggest that this trend may soon reverse.
Liquidity Shifts Could Push Bitcoin Higher
One key factor influencing Bitcoin’s outlook is the decline in the Federal Reserve’s Reverse Repurchase Agreement (RRP) facility, which has dropped to its lowest level in 1,387 days.
The RRP is a tool the Fed uses to manage short-term liquidity by allowing financial institutions to deposit excess cash in exchange for Treasury securities. A significant decline in the RRP balance suggests that financial institutions are shifting liquidity away from the Fed and into riskier assets, including Bitcoin and other cryptocurrencies.
As more liquidity enters the market, Bitcoin could benefit as investors seek alternative stores of value amid ongoing economic uncertainty.
Market Sentiment Remains Bullish Despite Recent Drop
Despite Bitcoin’s price decline, market sentiment remains positive.
- Weighted sentiment data from Santiment shows that investor sentiment toward Bitcoin is still bullish, indicating confidence in a price rebound.
- Bitcoin’s funding rate across derivatives markets stands at 0.0088%, suggesting that long-position traders remain optimistic.
- Historically, positive funding rates indicate strong demand for Bitcoin and suggest the potential for a price recovery.
Can Bitcoin Break Above $100K?
If the trend of liquidity inflows continues, Bitcoin could break above the crucial $100,000 resistance level, setting the stage for another bull run. A move beyond this threshold could push BTC toward its all-time high of $109,356.
However, if buying pressure weakens, Bitcoin could face further consolidation before its next major price move.
The coming weeks will be crucial in determining whether institutional accumulation and macroeconomic shifts will fuel Bitcoin’s next leg higher.
