BIG Week for BITCOIN: 100,000 Bitcoins Removed From Exchanges

👇1-11) Currently, near the top of its range, Bitcoin faces a challenge in breaking above new all-time highs. This can be attributed to the Bitcoin halving on April 20. Following this event, the minting of stablecoins notably slowed down, and wallets holding $>10m in stablecoins declined. This trend is currently impeding Bitcoin from surpassing its all-time highs.

👇2-11) Over the past month, a substantial amount of Bitcoins, worth $6.75bn, were withdrawn from exchanges (-97k BTC, nearly -100k BTC). This record-breaking movement was primarily driven by two US-focused exchanges, Kraken (-55k BTC or $3.8bn) and Coinbase (-24k BTC or $1.7bn). The previous week, $771m was moved off exchanges, a significant figure compared to the 13.5k BTC issued last month. The only exchange with a substantial inflow was Tether’s Bitfinex exchange (7.2k BTC). As a comparison, Bitcoin ETFs have bought roughly $3.9bn worth of Bitcoins (or 56k BTC) during the last month.

👇3-11) Similarly, a substantial amount of Ethereum, worth $1.9bn, was removed from exchanges last month. However, the flows of Ethereum between exchanges have been mixed. Inflows were recorded from Binance and Coinbase, while outflows were observed from Bitfinex and Kraken. In the previous week, only $56m worth of Ethereum was removed from exchanges, indicating a notable slowdown in the outflow. Demand for Ethereum has been slowing in various forms (here).

Bitcoin’s 71,946 is the most important level now

👇4-11) Inflows into crypto have totalled $3.2bn during the last seven days, leading Bitcoin to rally by 2.8%. Based on historical regression analysis, we would have expected a rally of 3.6%. The R-square is 33%. Inflows increased this week by $3.2, breaking into $290m inflow through USDT, $-100m outflow through USDC, $1510m inflow through Bitcoin Spot ETFs, and $1800m inflow through Bitcoin perp open interest rate expansion. Ethereum futures saw -300m outflow. Bitcoin prices rallied 2.8%, and Ether prices declined 1.8% this week.

👇5-11) The Crypto market cap stands at $2.55trn, 0.8% larger than the week before, with an average weekly volume of $78bn, 5% higher than the average. Bitcoin's dominance is 53.9%, an increase of 1.1%. Weekly Bitcoin volume was 27.2bn, 13% higher than the average, while Ethereum volume was 13.5bn, -13% lower than the average. Ethereum network fees (8 Gwei) are in the 11%ile range, which indicates low network usage.

Bitcoin 7-day rolling return (RHS, %) vs. Money Flow (LHS, $bn)

👇6-11) The Bitcoin funding rate decreased by -2.6% this week to 9%, in the 44th percentile (%ile) of the last six months. Futures open interest increased by $1800m to $20.3bn. The Ethereum funding rate decreased by -5.4% this week to 11%, which is in the 37th percentile of the last six months. Futures open interest decreased by $-300m to $12.4bn. Hence, a notable divergence exists between position increase for BTC and position decrease for ETH. Ethena USDe has reached $3.4bn, but with a shrinking funding rate, the ENA price has declined.

👇7-11) Bitcoin miner block rewards have rebounded to $38k from the May 13 $28k low. Mining network difficulty has slightly been lowered as the hash rate holds relatively firm at 600m TH/s. Overall, mining data is marginally bullish for Bitcoin mining stocks.

👇8-11) US CPI is the most critical data point (this week), and while consensus expects CPI to remain at 3.4%, inflation could marginally decline either this month or next. If CPI prints at 3.3% (or lower), Bitcoin could attempt to break out. If CPI prints at 3.5% or higher, Bitcoin will likely correct over the next few weeks (not our base case). We would still have an upside bias for higher Bitcoin prices.

CPI (purple) vs. our model (white) - eventually, expecting lower CPI

👇9-11) Notable events this week: June 10: Fjord Foundry (FJO) Launchpad goes live on Solana; June 12: US CPI forecast 3.4%, previous 3.4%; FOMC meeting: no change, probability 99.4%; Aptos unlock $97m, June 13: IMX unlock $51m, FET, AGIX, OCEAN complete token merge, June 14: STRK unlock $75m, Euro 2024 starts, CHZ impacted; June 15: SEI unlock $62m; June 16: ARB unlock $90m, APE unlock $18m, UNI unlock $90m; June 18: XLM mainnet upgrade; June 19: Flow testnet upgrade; June 21: ID unlock $51m, June 17: Trump - Biden first debate, MAGA +144% last 30 days; other events without date: pSTAKE will launch liquid staking solution for Bitcoin soon;

👇10-11) Notable events last week: Coinbase launched its Smart Wallet, simplifying the on-boarding process; Bitcoin Staking Protocol ‘Babylon’ raised $70m funding; Solv Protocol announced the launch of SolvBTC Ethena Yield Vaults, the first yield-bearing Bitcoin with stakers earning Solv Points on top of APY rewards; Uniswap postponed feed-switch vote;

👇11-11) Notable news during last week: Telegram's New In-App Payment Token 'Stars', Kraken's $100m Pre-IPO Fundraising; Robinhood to Acquire Bitstamp for $200m, World of Women (NFT project) and Tezos Partnership; Inflation Reduction Program by Phoenix Global; Sei Blockchain's Performance and Environmental Commitment.