Bitcoin and Ethereum exchange inflows have recently plummeted to their lowest levels in a year, signaling a decline in selling pressure and traders’ hesitance to divest from their positions as speculation about a potential interest rate cut by the U.S. Federal Reserve intensifies. The latest market insights from CryptoQuant reveal that Bitcoin inflows have decreased to a seven-day average of 25,000 BTC, down significantly from 51,000 BTC recorded in July.
This shift reflects a broader trend within the cryptocurrency landscape, where stablecoin deposits, particularly of USDT, have surged sharply. The marked increase in stablecoin accumulation indicates that investors are positioning themselves with capital available for potential buying opportunities, especially if the Fed announces a 25 basis point rate cut. The crypto market anticipates substantial developments from the Federal Open Market Committee (FOMC) meeting.
Concurrently, Bitcoin’s average deposit per transaction has halved from 1.14 BTC in mid-July to 0.57 BTC in September, indicating reduced selling activity from larger holders. Ethereum’s exchange inflows follow a similar pattern, currently standing at a two-month low with an average of 783,000 ETH, down from 1.8 million ETH in mid-August. The average ETH transaction size has also decreased from previous highs of 40-45 ETH to around 30 ETH.
Julio Moreno, head of research at CryptoQuant, reports that USDT net deposits reached $379 million as of August 31, marking the highest level for the year. Moreno described this accumulation as “dry powder,” which investors may deploy into the crypto market, particularly Bitcoin, if the anticipated rate cut is realized. The Bitcoin Bull Score, which reflects market sentiment, has shifted from a bearish to neutral stance, indicating strengthening bulls ahead of the Fed’s decisions.
Bitcoin’s price recently bounced from a low of approximately $108,000 to $115,000, primarily due to outflows from exchanges. Generally, outflows suggest increased buying pressure as coins leave exchanges, while inflows signify selling pressure as coins are deposited. For over a week, Binance has experienced only outflows, contributing to Bitcoin’s recovery from its lower boundary support levels.
With analysts widely predicting an impending rate cut, Bitcoin is also experiencing its most robust September performance in 13 years. Historical patterns indicate that when Bitcoin ends September in positive territory, it often results in significant gains in October and November, averaging a combined increase of about 35%.
Technical analysis reveals that Bitcoin needs to establish a strong daily close above ~$117,200 to re-enter the blue daily trading range around $120,000, propelling it potentially into another bullish leg. Current charts exhibit a well-defined ascending channel established since May, suggesting solid institutional support around the $108,000-$111,000 zone. Following resistance met at around $125,000 in August, Bitcoin’s recent price action signals a healthy pullback, reaffirming bullish sentiment.
If Bitcoin successfully surmounts immediate resistance, projections anticipate price targets in the $128,000-$132,000 range. Such an upswing would represent a potential rally of 12-15% from its current levels, further solidifying a prevailing bullish outlook amidst significant market developments.
