Yerevan (CoinChapter.com) — Bitcoin prices climbed in the early New York session Tuesday as on-chain data alerted about a large capital outflow from the US-based cryptocurrency exchange, Coinbase Pro.
According to CryptoQuant, a blockchain analytics platform, investors withdrew a total of 14,666 BTC out of Coinbase Pro hot wallets. The South Korean platform considers larger outflows as signs of institutional buying, which typically follows a surge in the Bitcoin-to-dollar exchange rates.
The alert surfaced when the benchmark cryptocurrency was rebounding from its intraday low of $53,000. That further raised hopes among retail traders that institutional investors utilized the latest dip to purchase $844 million worth of Bitcoin as a long-term strategy.
Earlier this year, such massive spikes in Bitcoin outflow from Coinbase typically followed up with announcements from MicroStrategy and Tesla that they had added the cryptocurrency to their balance sheets. So it appears, traders remained hopeful that Coinbase sold bitcoins to a larger corporate, especially as the cryptocurrency emerges as a viable alternative to cash reserves.
The BTC/USD exchange rate surged to $55,478 during the US session, also as investors waited for the Federal Reserve Chairman Jerome Powell’s testimony before Congress.
They expect the central bank governor to say that the US economy’s recovery remains far from complete — and that his office would continue its loose monetary policies by maintaining its $120 billion monthly asset purchase program and keeping benchmark interest rates near zero at least until 2024.
Bitcoin has done extremely well in a globally dovish environment. The cryptocurrency surged by more than 1,500 percent in the previous 12 months as bond-buying programs stressed yields lower, making it less attractive for foreign investors to inject money into the US. It also boomed against massive declines in the US dollar index, also as the White House approved three coronavirus stimulus packages worth a combined total of $5 trillion.
“To me, this looks like a healthy correction for #Bitcoin,” said Michaël van de Poppe, an independent market analyst. “As long as $49,000-51,000 holds, I’m assuming we’ll see continuation towards $68,000.”