Bitcoin Observes Pullback To $58,000: Is This The Cause?
August 15 2024 - 6:30PM
NEWSBTC
Bitcoin has observed a pullback down to the $58,000 level during
the past day. Here’s what could be the cause behind it, according
to on-chain data. Exchanges Have Seen A Large Amount Of Tether
Withdrawals Recently According to data from the market intelligence
platform IntoTheBlock, centralized exchanges have recently seen a
Tether (USDT) outflow spree exceeding $1 billion. Related Reading:
This Is The On-Chain Level That Made The Bitcoin Crash Bottom
Investors usually keep their coins in exchanges when they want to
trade them in the near future, so them making the move to withdraw
their tokens potentially implies that they are interested in
holding into the long-term. For volatile assets like Bitcoin,
exchange outflows can naturally be a bullish sign for this reason.
In the context of the current topic, though, the asset being
withdrawn is a stablecoin, so the implication for the market is a
bit different. Generally, investors store their capital in the form
of fiat-tied tokens like Tether when they want to escape the
volatility associated with coins like BTC. Such holders do
eventually plan to venture back into the other side of the market
and they may use exchanges for doing so. When holders buy into
assets like Bitcoin using their stablecoin, they naturally end up
boosting their prices. As such, exchange inflows of stables can be
a bullish sign for the sector. Withdrawals of USDT and others into
self-custody instead, however, can be a bearish sign for the
market, as it shows the investors don’t believe they would be
making a swap into the volatile side in the near future. The latest
Tether withdrawals may, therefore, be why the Bitcoin price has
tumbled. This USDT exiting exchanges could even have represented
fresh BTC sells, as many investors like to move into self-custody
as soon as they have swapped between assets. As IntoTheBlock has
pointed out in the chart, the last two large USDT exchange outflows
also had a bearish effect on BTC. In some other news, the
cryptocurrency derivatives market as a whole has seen a large
amount of liquidations as a result of the volatility that Bitcoin
and other coins have displayed during the past day. Below is a
table from CoinGlass that sums up the liquidations that have
occurred in the latest volatile market phase. As is visible above,
around $146 million in cryptocurrency liquidations have occurred
over the past day, with $120 million coming from the long contracts
alone, representing more than 80% of the total. Related Reading:
Bitcoin ETFs Are “Important, But Not The Drivers,” On-Chain Analyst
Argues Interestingly, Ethereum (ETH) is the symbol that has
contributed the most towards this derivatives flush and not Bitcoin
like is usually the case. That said, ETH has only $6 million more
liquidations than BTC. BTC Price At the time of writing, Bitcoin is
trading around $58,800, down 4% over the last 24 hours. Featured
image from Dall-E, IntoTheBlock.com, chart from TradingView.com
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024