Key Points
- Bitcoin is being accumulated and moved from exchanges to cold wallets, indicating investor confidence.
- Bitcoin’s bullish momentum is supported by its growing demand in decentralized finance (DeFi).
Bitcoin [BTC] is showing resilience as the cryptocurrency market anticipates a bullish end to the year. At the time of writing, Bitcoin was trading at $64K, after reaching a high of $66K three days prior. The slight dip is seen as a brief correction, with on-chain data revealing that Bitcoin is being transferred from exchanges to cold wallets.
Bitcoin’s Bullish Outlook
This activity suggests investors are accumulating Bitcoin in anticipation of a rally, indicating a belief in Bitcoin’s long-term price stability. The movement of Bitcoin away from exchanges supports this bullish outlook, with Bitcoin now trading above the bull market support band. If Bitcoin can maintain this momentum, it could trigger a significant upward movement that could potentially surpass all-time highs.
Bitcoin’s strongest fourth quarters historically follow a bullish September. This year, Bitcoin has already gained over 8% in September, setting the stage for a potential surge to new highs in November. This performance strengthens the case for a bullish outlook, with Bitcoin likely to rise even higher in the coming weeks.
Short-term Investors and DeFi
Bitcoin’s recent price movement has also brought short-term investors back into profit. These investors, who have moved their Bitcoin within the past 155 days, are now seeing gains as the price trades above the $63K level. This trend aligns with the broader trend of Bitcoin leaving exchanges, further reinforcing the bullish outlook.
Another factor supporting Bitcoin’s bullish momentum is the growing demand for Bitcoin in decentralized finance (DeFi). Currently, 1% of Bitcoin’s total supply is locked in DeFi protocols. This is driven by the increasing demand for Bitcoin-based yield and the launch of Coinbase’s new Bitcoin-pegged token, cbBTC. As more Bitcoin is locked in DeFi, its scarcity in spot markets increases, which could drive the price higher.
The reduced availability of Bitcoin on exchanges, coupled with its growing use in DeFi, creates an environment where Bitcoin could see significant price increases in the coming months. These developments add further confidence to the bullish outlook as markets head into the final quarter of the year. Bitcoin’s current strength, increased accumulation, and rising demand in DeFi suggest a positive trajectory for its price. If Bitcoin can sustain these trends, it could break new highs before the year ends.
