The cryptocurrency market is buzzing with mixed signals. While Bitcoin (BTC) continues to trade near $66,000, on-chain data from Santiment reveals a surge in whale activity. As of this writing, Bitcoin boasts a market cap of $1.304 trillion.
Bitcoin Whales Accumulate at Two-Year Highs
According to Santiment, the number of Bitcoin wallets holding 10 or more BTC has reached levels last seen in June 2021,a period marked by a 226% increase in market cap. This renewed whale accumulation has sparked speculation within the crypto community, particularly regarding the recent collapse of FTX. Some believe the bankrupt exchange may have been artificially suppressing the price in late 2022.
Interestingly, a correlation has emerged between whale activity and BTC price movement since FTX's demise. However,despite this accumulation, the price continues to struggle, lacking the momentum to break above $70,000.
Fed Rate Cuts: The Key to a Crypto Rally?
While Bitcoin flirts with its all-time highs, most altcoins remain significantly below theirs, creating a cautious market atmosphere. Renowned analyst Benjamin Cowen warns against premature excitement for an altcoin bull run. He emphasizes that a substantial crypto rally hinges on the Federal Reserve cutting interest rates again. Historically, altcoin markets thrive in such environments.
Cowen elaborates:
"The decline in altcoins mirrors the falling advance/decline index, reminiscent of the period leading up to the 2019 Fed rate cut. This index dipped sharply before the Fed's July 2019 rate reduction. Tracking these movements is crucial because an altcoin season dominating Bitcoin might be premature without a Fed interest rate cut."
He additionally advises investors to exercise caution when buying altcoins during periods of high Bitcoin dominance.
Additional Information:
The correlation between whale activity and Bitcoin price movement requires further observation and analysis.
The Federal Reserve's future monetary policy decisions will significantly impact the broader cryptocurrency market.
Investors should conduct thorough research before making any investment decisions.
Disclaimer: This article is for informational purposes only and should not be considered financial advice.
Source: Coingape
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