- These long-term holders have proven to be more successful than short-term traders who frequently buy and sell Bitcoin.
- The Federal Reserve has been hinting at potential interest rate hikes for the past two months, even though they decided to pause the hike in the previous month’s FOMC meeting.
Last week, a significant number of prominent investors with substantial BTC holdings took action after years of dormancy. On July 20, two wallets from 2011, each containing 10 BTC (currently valued at $290,222 as of this writing), transferred their holdings to new locations. The following day, a wallet holding 5 BTC ($146,383) moved after remaining inactive for 12 years.
Moreover, approximately $30.3 million worth of “digital gold,” equivalent to 1,037 BTC, was transferred by its owner to a new wallet, marking the first movement since 2012, when the cryptocurrency was valued at $4.92 per coin.
A BTC whale that has been dormant for 11 years transferred all 1,037.42 $BTC($37.8M) to a new address"bc1qtl" an hour ago.
The whale received 1,037.42 $BTC($5,107 at that time) on Apr 11, 2012, when the price was $4.92.https://t.co/k8ZmO5vc8X pic.twitter.com/xBaw2dQfY8
— Lookonchain (@lookonchain) July 22, 2023
Finally, on July 24, a wallet from 2010 made a substantial move, transferring 50 BTC, which amounts to $1.4 million in today’s value. Bitcoin whales are investors who accumulate substantial amounts of Bitcoin (at least 1,000 BTC) and hold onto it for extended periods, reaping astronomical gains.
These long-term holders have proven to be more successful than short-term traders who frequently buy and sell Bitcoin. While the asset experiences extreme volatility in the short run, it has surged from less than $95 per coin to $29,203 over the past decade, representing a remarkable 30,700 percent increase.
Throughout this year, whales have been particularly active. According to a report by the blockchain data firm Glassnode on Monday, whale activity has seen a noticeable surge in recent months. Many whales have been transferring their holdings to exchanges, typically the preferred method to cash out or reallocate their assets to other digital currencies.
Changing Dynamics: Crypto Markets and Macroeconomic Events
Investors are closely monitoring the Bitcoin price, anticipating a clear market direction for the world’s largest cryptocurrency. While it initially seemed like BTC was awaiting a trigger from investors, it is now evident that macroeconomic conditions have the potential to exert a more significant impact on price action.
A case in point is the two recent U.S. central bank interest rate hikes in May and March, which led to relatively mild price movements of 1.13 percent and -2.87 percent, respectively. Similarly, reactions to recent inflation and GDP data were also subdued, with BTC experiencing only -0.74 percent and 1.16 percent movements, respectively. Considering these factors, the crypto markets have already factored in the anticipated move on Wednesday.
Of greater interest to traders is that BTC’s price has declined below the lower range of its Bollinger Bands, signaling a potential upward movement, albeit modest. Bollinger Bands, a technical indicator based on an asset’s 20-day moving average, plot price levels two standard deviations above and below the average.
Federal Reserve Meeting Anticipation: Impact on Bitcoin Price
Bitcoin price has been experiencing a prolonged period of sideways movement for over a month, with the cryptocurrency still hovering around the same price level as in April, despite the volatility observed in the past three months. BTC holders have eagerly awaited a breakthrough above the $32,000 mark to signal the start of a bullish trend. However, their hopes may be dampened by the upcoming Federal Reserve meeting scheduled for July 26.
The Federal Reserve has been hinting at potential interest rate hikes for the past two months, even though they decided to pause the hike in the previous month’s Federal Open Market Committee (FOMC) meeting. Reports indicate that the upcoming meeting of the FOMC will see a unanimous decision to raise interest rates by 25 basis points, resulting in a target rate increase from 5 percent – 5.25 percent to 5.25 percent – 5.50 percent.The probability of this rate hike is notably high, as indicated by the CME FedWatch Tool, which places it at 98.9 percent.
As a result, the interest rate hike will likely have a bearish impact on the Bitcoin price, potentially leading to a short-term pullback in its value.