DAY 2 - Daily BTC Update 
2024-12-22
Category: None

Yesterday's Update   

I’ve dropped the chart to a daily timeframe to analyse signals that upward momentum could return. Here's what I’m seeing:

STOCH RSI: The indicator is nearing a cross, historically pointing to a potential bounce.

0.236 Fibonacci Level: The current candle at this level is a Dragonfly Doji, which, if confirmed by the next few candles, is often a signal for reversal.

Many of you have asked why markets dipped despite the 25bps rate cut. Here’s the insight:

Federal Reserve Outlook: The Fed has signalled fewer rate cuts in 2025, tempering market enthusiasm and creating uncertainty in risk assets, including Bitcoin.

BTC Exchange Net Outflows: Over the past 24 hours, 4,169 BTC have been removed from exchanges, continuing a two-day streak of net outflows. This suggests a decreasing supply of Bitcoin on exchanges, a possible sign that holders are moving assets to cold storage or other off-exchange wallets, signalling confidence in holding for the longer term.

Supply and Demand in Bitcoin

Understanding supply and demand is crucial for interpreting Bitcoin’s price movements:

Supply: When the supply of Bitcoin on exchanges decreases, as we’re seeing now, it often indicates that fewer people are willing to sell. Holders moving BTC to cold storage or off-exchange wallets typically signal confidence in Bitcoin’s future value and reduce the immediate availability for trading.

Demand: If demand for Bitcoin remains constant or increases while supply decreases, basic economic principles suggest that prices will likely rise. Conversely, if demand weakens while supply remains limited, the price can stagnate or fall.

Right now, the net outflows from exchanges suggest supply is tightening, setting the stage for potential upward price pressure if demand increases. Now we need to watch and wait for a TETHER print that often happens with increased demand.

Please give me a like if this has helped and see you again tomorrow :) 
