Bank of America Sees Support for Bitcoin Rally as Personal Wallet Hoarding Increases
According to a recently drafted note by analysts from Bank of America (BofA), investors are intensifying their efforts to move crypto to personal wallets, which market observers interpret as an indication of lower ‘sell pressure’ on Bitcoin (BTC).
During the week through April 4, a period which showed the second-largest net BTC outflow from cryptocurrency exchanges this year, a net $368m worth of the top crypto was transferred to personal wallets, BofA strategists Alkesh Shah and Andrew Moss wrote in a note obtained by Bloomberg.
The two analysts further stated that “investors transfer tokens from exchange wallets to their personal wallets when they intend to hold them (or HODL), indicating a potential decrease in sell pressure.”
In their note, the strategists said that concerns triggered by the US regulatory clampdown on crypto exchanges could be the main factor causing the efflux from platforms.
Possible Impact of Upcoming Economic Data
Garry Krugljakow, the founder of 0VIX, an open-source protocol for lending and borrowing, commented that traders are waiting for another major signal to confirm BTC’s breakout.
Economic data due to be released in the US this week could serve as such a signal, he said, in particular the country’s consumer price index that is to be published today.
Bloomberg News’ latest survey presents a median estimate of a 5.1% jump in March compared with a year earlier. Some crypto market observers believe that the BTC price could respond positively to any figures demonstrating weakness in the US consumer sentiment.
“Anything below 5.2% or around 5.2% could lead to a bullish continuation for” BTC, according to Krugljakow. “5.3% or higher will most likely give a slight shock and dampen the current price action.”
With Bitcoin’s price reaching above $30,000 this week for the first time since June 2022, the top crypto is up more than 80% since Dec. 31.
Alongside a number of other cryptocurrencies, Bitcoin’s price has risen since the beginning of this year in spite of the tough stance American regulators adopted in the aftermath of FTX’s collapse in late 2022.
Many market analysts believe that a break above $30,000 could open the door to a near-term test of the late-May 2022 highs of around $32,500, which could represent a further increase of 10% compared with the current level of Bitcoin’s price.
“Bitcoin has stopped reacting to bad news,” commented Nathan Batchelor, the managing partner at data analysis platform Biyond Trader. “This is a tell-tale sign of a strong buyers’ market.”