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HomeCryptoAnatomy of Bitcoin's current rally as the Fed tries to save the...

Anatomy of Bitcoin’s current rally as the Fed tries to save the day money moguls


  • Inflation fears increase demand for bitcoins as investors focus on hard money.
  • Assess short-term selling pressure or sustained upside potential.

Bitcoin It has picked up some strong bullish activity this week that has pushed it to a new 6-month high and a new YTD high. But the reason for this rally is much more interesting and could set the pace for bitcoin’s performance for the rest of the year.

Bitcoin mainly attributes its latest rally to fears of the collapse of traditional finance. Those concerns have undermined confidence in the banking industry after the collapse of Signature and SVB.

Concerns about traditional financial pressures may have led many to move their funds to bitcoin.

trade concerns Worried about inflation. Recent reports suggest that the Federal Reserve reportedly printed $300 billion this week. The move puts the Fed in a difficult position and undermines recent efforts to fight inflation.

The reports also claim that half of the printed amount was used to bail out SVB and Signature Bank after their recent crisis. Bitcoin’s weekly rally is significant as it confirms a positive response to inflationary concerns.

A preference for hard money is expected in such circumstances, so expect more demand for BTC if the Fed continues to print money.

Assessment of the current demand for bitcoin

new wave in bitcoin demand it is more pronounced, especially among retail shoppers. The number of bitcoin addresses that currently hold at least 0.01 BTC recently hit a new all-time high. This confirms that retail buyers are piling up.

Whales are also accumulating BTC. The number of addresses with more than 1000 BTC has been increasing since February 12. However, demand for whales remains relatively low as the market is still trading below its weekly high.

Source: Glassnode

Can Bitcoin sustain the current rally?

The Bitcoin trade flow shows that both trade inflows and outflows have decreased significantly in the last 24 hours. indicates a Drop in buying and selling pressure.

However, currency inflows were slightly higher than outflows at press time, confirming that there was some selling pressure.

bitcoin exchange flow

Source: CryptoQuant

Also, this week saw an increase in demand for BTC derivatives. This was evident from the jump in open interest to a new weekly high.

However, despite this rally, leverage levels in the market are still low, indicating some level of uncertainty in the market.

Bitcoin Open Interest Rate and Estimated Leverage

Source: CryptoQuant

The above uncertainty may indicate that investors are unsure if BTC can add enough selling pressure. Or, can it sustain the current rally? Short term.


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