Earlier this year, when USDT exchange outflows exceeded $1 billion, Bitcoin soon began to trend down, suggesting that investors may be taking a risk-off stance.
One analyst noted that the current price action “feels extremely similar to what Bitcoin did last year,” when it traded sideways for two months after a sharp drop in August.
Cryptocurrency prices have rebounded sharply from last week’s volatility, with Bitcoin (BTC) bouncing back above $60,000 after falling below $50,000 during the Aug. 5 crash. But further gains may be elusive — at least according to one indicator that points to recent local highs.
Crypto analytics firm IntoTheBlock noted that more than $1 billion in Tether stablecoin USDT was withdrawn from cryptocurrency exchanges on Tuesday, the largest single-day withdrawal since May.
IntoTheBlock analysts said: In recent cases where the amount of withdrawals exceeded $1 billion, Bitcoin began to decline shortly afterwards, indicating that investors may be taking a risk-averse stance and transferring funds to safer environments such as cold wallets to cope with market volatility.
Bitcoin fell to $59,000 during Wednesday’s U.S. trading session, completely giving up yesterday’s gains above $61,000, even as Wednesday’s U.S. CPI inflation report reassured expectations of a September rate cut.
Seasonal trends do not bode well for cryptocurrency price increases. Data compiled by CoinGlass shows that throughout Bitcoin’s history, monthly returns have been negative for much of August and September.
Miles Deutscher, a well-regarded cryptocurrency analyst, noted that Bitcoin’s current price action is similar to last year’s, when BTC fell from the top of the $30,000 range to $24,000 during a massive leveraged run in August and traded mostly sideways for two months before starting to rise in October.
“There’s rapidly fading retail interest, apathy from existing market participants, and a lack of a clear narrative,” he said. “It feels eerily similar to August-October last year.”
