Bitcoin’s recent price rise has been widely attributed to a variety of factors, such as the banking crisis, the dollar’s decline in dominance, and institutional adoption. However, new data from Bank of America (BoA) analysts suggests that this surge may have just begun as there is still gas for more rallies.
The analyst reveals a growing trend of investors withdrawing their assets from exchanges and moving them to personal wallets, indicating a long-term bullish outlook for the cryptocurrency as well as room for more rallies.
Bitcoin still has gas for more rally
Despite Bitcoin recently hitting a major high of $30,000, up over 80% since the beginning of the year, the BoA analysts believe that the asset could still hit another big high sooner or later.
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According to a note from Bank of America strategists Alkesh Shah and Andrew Moss, $368 million worth of BTC was sent to personal wallets in the week through April 4, coinciding with the second-largest net outflow of BTC from crypto exchanges this year.
The report notes that the trend of moving tokens from exchanges to personal wallets basically indicates that investors want to keep them for the long term, indicating reduced selling pressure.
The analysts said:
Investors transfer tokens from exchange wallets to their personal wallets when they intend to hold them (or HODL), indicating a potential reduction in selling pressure.
According to the report, concerns about regulatory crackdowns in the US may have played a role in the recent outflow of Bitcoin from exchanges. Major crypto companies in the United States, such as Coinbase and Binance, have faced increased scrutiny from regulators, leading some investors to move their assets away from these platforms.
Despite these regulatory concerns, the overall trend of investors moving Bitcoin from exchanges to personal wallets suggests a bullish outlook for the cryptocurrency. This trend indicates that investors are confident in BTC’s long-term potential and don’t care about short-term price fluctuations.
While some analysts have warned of a potential price correction in the near term, the growing trend of investors moving Bitcoin into personal wallets suggests that the cryptocurrency still has a long way to go in its rally.
Most BTC too long term?
Backing up the BoA analysts, Glassnode data recently revealed that many Bitcoin holders have chosen to leave their BTC dormant in their wallets, indicating that they are prepared to want to keep their Bitcoin holdings for the long term.
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According to Glassnode, there are now more BTC that is dormant than there are Bitcoin available to buy on exchanges. Almost 29% of all BTC in circulation have not moved in the last 5 yearswhich is over $200 billion in market capitalization that hasn’t moved in half a decade.
Notably, Bitcoin has started to ignore negative news in the crypto industry and has continued to move in a bullish trend. Over the past 7 days, the asset has increased by more than 7%, pushing the global market capitalization to nearly $1.3 trillion.
Bitcoin has a trading price of $30,254, at the time of writing.
Featured image from Shutterstock, chart from TradingView