Riding The Wave News Summary 177

No, Bitcoin withdrawals from exchanges are not inherently bullish for crypto, Robinhood’s Crypto Wallet Adds Bitcoin and Dogecoin, & more.

Aug 31, 2023

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No, Bitcoin withdrawals from exchanges are not inherently bullish for crypto

Crypto analysts on X (the social media platform formerly known as Twitter) and in YouTube interviews have been abuzz with talk about the trend of Bitcoin leaving centralized exchanges.
On Aug. 29, the quantity of Bitcoin held within exchanges saw a decline, reaching its lowest point since January 2018. While various factors might underlie this movement, experts analyzing blockchain data often interpret the shift as a positive indicator. Traders are now questioning what might have been causing Bitcoin’s inability to break above $31,000 since this price action doesn’t align with their view that fewer coins on exchanges is bullish for the BTC price.
The perspective on the decline of Bitcoin held at centralized exchanges stems from the notion that when traders withdraw their coins, it signals a bullish sentiment. This is typically associated with a strategy of holding assets in self-custody for the long haul.

Data from blockchain transactions displays a consistent reduction in Bitcoin deposits on exchanges since mid-May. Concurrently, Bitcoin’s price trajectory fails to offer substantial indications of a bullish upswing, with the exception of a brief surge in mid-June that coincided with BlackRock's submission of an application for a spot exchange-traded fund.

Certainly, all indicators are prone to occasional inaccuracies, and depending solely on on-chain analysis to dictate market trends is unwise. Yet, the notion that withdrawals from exchanges are predominantly earmarked for transfer to cold storage lacks substantial grounding and exists largely as a hypothetical proposition. For example, there are three possible reasons that explain reduced deposits on exchanges unrelated to a diminished short-term selling intent.

Even if one postulates that the majority of the Bitcoin departing from exchanges is indeed headed to cold wallets, implying holders have a reduced propensity to engage in short-term selling, the demand facet of the equation has encountered its own set of challenges. For instance, a search for “buy Bitcoin” on Google Trends has struggled to surpass 50% of its previous two-year peak.

As a result, the data underscores a waning interest from buyers, which in turn mirrors Bitcoin’s lack of bullish momentum. This parallel trend aligns with the decrease in the number of coins being deposited on exchanges. Consequently, despite Bitcoin’s exchange deposits plummeting to levels last seen in 2018, the effect on the supply-demand equilibrium is negligible, owing to the subdued trading activity that has prevailed.

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Robinhood’s Crypto Wallet Adds Bitcoin and Dogecoin

Robinhood Markets Inc. on Wednesday added wallet support for bitcoin (BTC) and dogecoin (DOGE), increasing the breadth of its crypto wallet beyond the Ethereum ecosystem.
All users of Robinhood wallet can now send and receive BTC and DOGE, the company said in an emailed statement. It said its six-month-old wallet has hundreds of thousands of users spread across 140 countries.

The company also on Wednesday began rolling out swap features for “select users” that allow them to trade ether for over 200 different assets. The wallet is capable of charging users gas fees – the price for transacting on Ethereum – from any tokens they hold, not just ETH. All users will have access to the swap feature in the coming weeks, Robinhood said.

Full Article

Elon Musk’s X moves closer to crypto payments with new state license

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