- Binance’s BTC reserves went up by 22,106 as there was a decrease in global exchange reserves.
- US inflation declined to 2.4% in March boosting hopes that the Fed is going to reduce interest rates in the near future.
- Following the release of the CPI data, Bitcoin surged nearly 8%, reaching $81,772.
According to CryptoQuant, Binance exchange reserves have been rising steadily and have now added 22,106 Bitcoins between March 28 and April 9. The total value of assets on the largest Bitcoin exchange rose from 568,768 BTC to 590,874 BTC this year, indicating increased trading and sentiment shifts.
This comes at a time when the Bitcoin balance on all exchanges is gradually drawn down. Recent data suggests that the total BTC on all exchanges is at 2.4 million BTC and this level was last recorded in 2018. The decoupling of Binance from other cryptocurrencies is evident to show some indication of burgeoning risk aversion among investors due to worsening macroeconomic conditions.
Traditionally, an increase in exchange reserves more often indicates the transfer of assets by the traders to the exchange to sell them or trade in derivatives. However, declines in other categories reaffirm that long-term holders remain committed to self-custody, supporting the theory that Bitcoin is a store of value.
Cooling Inflation Strengthens Bitcoin’s Bullish Narrative
Recent data on the US inflation rate has contributed to the continued upward trajectory in the price of bitcoins. The data from the US Labor Department reflects that the monthly change in the consumer price index for March was only 0.1%, while year-on-year inflation dropped to 2.4% against a market expectation of 2.6%.
Core inflation, which does not include the rate of food and energy, increased to 2.8% from 3.1% in the previous month. Such projections have given hope that the Federal Reserve may soon turn dovish on the policy front. Expectations on when the US will cut interest rates have risen, given various reports indicating that Powell may be planning to deliver an emergency rate cut given the volatile financial markets. Bitcoin could gain more attraction as an inflation hedge investment if the trend to lower inflation and improve the fundamental properties of risky assets continues.
Bitcoin Price Jumps 8% Amid Market Optimism
After the release of the CPI data, Bitcoin’s price jumped to $ 81,772, which is an increase of almost 8% as of the time of writing this article. BTC also climbed to its intraday high of $83,541 on the back of positive inflation figures released the same day and former US President Donald Trump’s announcement of a 90-day hiatus of tariff plans.
The trading volume for Bitcoin increased by 12% to reach $68 billion, which can be attributed to renewed interest in the market. There was also a decline in the US 10-year Bond Yield of 1.6% to 4,325, and the US Dollar index was at a 1.03% down position to 101.332. These movements can be attributed to investors’ increasing demand for risk-on assets such as Bitcoin.
Mathew Hyland, a prominent crypto analyst, suggest that an expectation for an additional lowering of the Fed rates may be the next reason for a Bitcoin surge. With the conventional safe-haven assets’ yields fading due to low interest rates, Bitcoin emerged in the new role of a store of value for both retail and institutional investors.
