Exchange Exodus

Chart of the Day

Exchange Exodus. BTC’s net exchange position experienced one of the sharpest drops in history as around 111k BTC has left exchanges in the past 30 days. The recent burst of outflow started on July 31, where regulatory pressure stateside, in particular the crypto tax provision in the infrastructure bill, incited a fresh round of uncertainty and speculation that resulted in the exodus of coin supply from exchanges. However, historical data on exchange net position, which more often than not coincides with extended periods of rallies, reveals its cyclical nature. Large outflows, in general, are perceived as bullish signs indicating that we are not yet near the top. 

Talk of the Town

Taper Tantrum. The Federal Open Market Committee (FOMC) minutes released on Wednesday confirm that tapering is likely to start as early as this fall, despite split views on the durability of faster inflation and key areas of policymaking. However, the balance sheet will continue to grow as the Fed reinvests proceeds. The stock markets were largely weighed down by the prospects of the Fed withdrawing its financial support. Bitcoin dipped below its $45k support as an immediate response to the looming tapering, before staging yet another upside correction. On the bright side, crypto made its debut during the Fed’s closed-door meeting in July, another sign of becoming a force to be reckoned with, following its role in holding up the infrastructure bill in Congress.