$BTC $ETH #Bitcoin #CryptoNews #InterestRates #Investing #Cryptocurrency #FinancialNews #MarketTrends #Bullish #BTCPrice #FedPolicy
Could a Plummeting Bitcoin Exchange Supply Signal a Surge to $120,000?
In the latest bitcoin news, the U.S. Federal Reserve has made headlines by cutting interest rates by 25 basis points. This strategic move aims to stimulate the economy following a prolonged period of rate hikes intended to combat inflation. Such a reduction in interest rates typically favors risk-on assets, including Bitcoin ($BTC), as it enhances liquidity and risk appetite among investors.
Recent data indicates a notable shift in investor behavior. According to reports, the exchange supply ratio of Bitcoin has fallen to 0.0291. This decline suggests that a growing number of investors are opting to withdraw their Bitcoin from exchanges, choosing long-term holding over immediate selling. This trend reflects a broader confidence in the asset’s potential for future appreciation, particularly in light of the Fed’s dovish monetary policy.
As illustrated in a recent analysis, the tumbling exchange supply ratio coincides with a rising Bitcoin price. This correlation supports the thesis that the Fed’s interest rate cut has not only improved market liquidity but also mitigated selling pressure on Bitcoin. With Bitcoin maintaining stability above the $115,000 mark, the conditions appear ripe for further upward movement.
Analysts believe that if the outflow of Bitcoin from exchanges continues at its current rate, the digital asset may soon challenge the $120,000 resistance level. However, it is crucial for liquidity to keep flowing into the crypto market, driven largely by the Fed’s recent decisions. A sustained decline in the Exchange Supply Ratio, coupled with rising prices, paints a bullish picture. This scenario unfolds especially if traditional markets stabilize post-Fed announcement.
On the flip side, should the Exchange Supply Ratio begin to rise again—indicating a re-entry of Bitcoin onto exchanges—it could mean that investors are preparing to take profits near the $118,000 to $120,000 range. This potential shift in dynamic could signal a temporary halt in the current bullish momentum.
Further supporting this notion, analysts like Titan of Crypto have noted that Bitcoin is currently trading within a bearish fair value gap. A daily close above this gap could pave the way for Bitcoin to achieve new highs, further confirming a bullish outlook.
The declining exchange supply ratio also hints at an approaching “supply crunch” for Bitcoin, which could trigger significant price appreciation in the near term. Recent readings from the Bitcoin Scarcity Index indicate its first spike since June 2025, suggesting upward pressure on Bitcoin prices. This rapid outflow of Bitcoin from exchanges like Binance continues to reduce the active circulating supply of the asset, intensifying the bullish case.
However, concerns linger regarding the participation of large investors, or “whales,” in recent Bitcoin price movements. Their absence could impact the sustainability of the current trend. As of now, Bitcoin is trading at approximately $116,374, reflecting a slight decline of 1.3% over the past 24 hours.
In conclusion, the implications of the Fed’s interest rate cut are unfolding within the cryptocurrency market. The evolving Exchange Supply Ratio and the current Bitcoin price dynamics are crucial factors to watch as investors navigate this shifting landscape. For the latest updates and insights on cryptocurrency trends, explore our comprehensive coverage.
For those interested in trading, Binance offers a platform that could facilitate your investment strategies. Check out this referral link for more information.
Comments are closed.