8% of Bitcoin Transferred in a Week as Markets Teeter on the Edge

A noteworthy change in Bitcoin ownership has taken place amidst the recent downturn in the market, as uncertainty looms over a potential US Federal Reserve interest rate cut in December.

Key Takeaways

Over 8% of total Bitcoin supply was traded in the last week, marking a major event in Bitcoin history.
Historical comparisons show similar significant movements followed by price recoveries.
Current market sentiment is volatile, heavily influenced by upcoming Federal Reserve decisions on interest rates.
Recent expectations of a rate cut have increased, sparking a recovery in Bitcoin prices.

The recent market downturn has led to a significant shift in Bitcoin ownership, with over 8% of the total supply changing hands in just the past week. This movement has been characterized as one of the most important on-chain events in Bitcoin’s history, according to Joe Burnett, an analyst and director of Bitcoin strategy at Semler Scientific.

Joe Burnett noted in a post on X that during prior significant Bitcoin supply movements, the cryptocurrency traded around $5,000 back in March 2020 and around $3,500 in December 2018. Both instances coincided with a local bottom followed by a phase of accumulation that ultimately resulted in new all-time highs.

Interestingly, Burnett also mentioned that up to half of the current movement in Bitcoin supply may stem from a migration of Coinbase Wallets that was announced on Saturday.

Source: Joe Burnett

8% of Bitcoin changed hands in a week as markets on ‘knife’s edge’: Analysts

Bitcoin and the Wider Crypto Market on Edge

As the markets brace for the Federal Reserve's decision on interest rates in December, Bitcoin’s price and investor sentiment hang in the balance, described by Nic Puckrin, digital asset analyst and co-founder of educational platform The Coin Bureau, as being on a “knife’s edge.”

Puckrin stated, “What is more certain, though, is that the Fed holds the key to the market’s end-of-year finale, and its next rate decision will determine whether we get a Santa rally or a Santa dump,” when speaking to Cointelegraph.

Amidst this, expectations regarding a potential interest rate cut during the Federal Reserve’s meeting on December 10 have fluctuated significantly over the last week.

Interest rate cut probabilities. Source: CMEgroup.com

According to the CME Group’s FedWatch tool, markets are pricing in an 82% chance of a 25 basis point interest rate cut, a drastic increase from the 50% likelihood recorded the week prior. Puckrin noted that the rising expectations of a rate cut were key factors contributing to Bitcoin's price recovery from $81,000 to $87,000.

In summary, the cryptocurrency market remains highly reactive to developments regarding federal interest rates, and the outcomes of the upcoming decisions could greatly influence the year-end performance of Bitcoin and other digital assets.