Bitcoin Lacks Clear Direction As Exchanges See Record Outflow

Full article by Omkar Godbole found here.

Key Points:

• Bitcoin is in stasis as greater macroeconomic risk and fears prevent the asset from further immediate price increases.

• While Ether is seeing record daily outflows from exchanges (a bullish macro signal), price action has remained stagnant as well.

• Cryptocurrency market upside momentum has slowed down after the U.S. released an unexpectedly high August retail sale figures on Thursday, reanimating concerns of an early scaling back of Federal Reserve stimulus and increasing interest rates.

• Analysts at Standard Chartered predict the Fed to announce the taper next week after the Federal Open Market Committee meets on September 22nd. The interest rate increases will likely be deployed over time, with one increase in 2022 and two increases in 2023 and 2024 each.

• Fears of macroeconomic uncertainty have compounded with news that Chinese property giant Evergrande may default on their debt obligations, introducing the possibility of a rippling effect throughout financial markets including cryptocurrencies.

• Market activity in bitcoin futures and options indicate that investors are cautiously bullish. This is due to the modestly positive funding rates, which is the cost of holding long positions in perpetual futures markets. Higher costs indicate greater demand, and is often a measurement of short term market sentiment.

• Another bullish signal is observed from exchange outflows, where more than 360,000 ETH worth $1.2 billion has been taken off of centralized exchanges and stored in private wallets on Wednesday. This is the largest single day net outflow measured in dollars on record.

• Increases in exchange outflows are considered a bullish signal as it shows coins being taken out of the market, reducing supply while demand remains the same.