During previous significant Bitcoin transfers, Bitcoin traded at approximately $5,000 in March 2020 and around $3,500 in December 2018.
Bitcoin News
Over 8% of total Bitcoin supply has changed hands during the past seven days, marking one of the most significant on-chain events in Bitcoin history. The massive migration occurred as traders braced for the U.S. Federal Reserve's December rate decision.
Joe Burnett, analyst and director of Bitcoin Strategy at Semler Scientific, said the current market decline triggered unprecedented supply movement. During previous significant Bitcoin transfers, Bitcoin traded at approximately $5,000 in March 2020 and around $3,500 in December 2018.
Both occasions marked local bottoms ahead of accumulation phases that ultimately led to new all-time highs. However, up to half of the current Bitcoin supply movement may be attributed to a Coinbase Wallet Migration announced on Saturday.
Bitcoin's price and investor sentiment remain on a knife's edge due to mixed messages about December's interest rate cut decisions. Nic Puckrin, digital asset analyst and co-founder of educational platform The Coin Bureau, said the Fed holds the key to the market's end-of-year finale.
Markets are pricing in an 82% chance of a 25-basis-point interest rate cut, up from 50% a week ago. The growing expectations were the main fuel leading to Bitcoin recovery from $81,000 to $87,000.
Puckrin stated that as the Dec. 10 meeting approaches, market jitters are expected to continue, with the Fed's press conference having traders on the edge of their seats. The decision will determine whether markets get a Santa rally or Santa dump to close the year.
In just 10 days, Bitcoin dumped 23%, falling by over $24,000 and bottoming out at around $82,000 on Friday. Bitcoin has since recovered slightly, tapping $89,000 in late trading on Monday before settling around $87,000.
Glassnode on-chain data confirmed that supply movements of this magnitude have only occurred twice in the past seven years, both during bear markets. The historical precedent suggests current transfers could signal a significant turning point for Bitcoin price action.
CryptoQuant analyst I. Moreno noted that Bitcoin's Sharpe ratio has dropped to nearly zero, reaching levels usually seen near major market bottoms. The ratio measures return versus risk, and when near zero it means Bitcoin has delivered poor returns relative to volatility, potentially creating a better investment setup going forward.
The analyst observed that Bitcoin is entering the same zone seen in 2019, 2020, and 2022, when the ratio spent time at structurally depressed levels before new multimonth trends emerged. Historically, periods of low Sharpe ratio have often preceded new long-term uptrends when smart money enters as the risk-reward balance improves, though Bitcoin is not yet signaling trend recovery according to available blockchain data.
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