According to Glassnode’s on-chain data analysis, Bitcoin investors are hedging risks in order to be safeguarded against Federal Reserve interest rate hikes in March.
The most noteworthy trend in Bitcoin (BTC) right now, according to Glassnode’s The Week On-Chain newsletter from February 14, is the flat futures term structure through March. The reason for this is “investor anxiety about the larger economic implications of a stronger US currency.” The rate hike has already been priced into spot markets, but the long-term impact is still unknown. As a result, Glassnode has noticed that investors are taking precautions to shield themselves from the low possibility of a negative outcome.
Despite market players plainly reducing risk ahead of the Fed rate hike, Bitcoin exchange outflows continue to far outnumber inflows. Net outflows have averaged 42,900 BTC each month over the last three weeks. This is the biggest pace of outflow since October, when BTC reached a new all-time high of over $69,000 in November.
Long-term Bitcoin holders (those who have kept their Bitcoin inactive for at least 156 days) have a solid grip on the circulating supply, with around 13.34 million BTC in their possession. Long-term holders have only surrendered 175,000 BTC since the October 2021 high, indicating support for the recent $33,000 low and need for more coins.
Are you a Bitcoin investor? Are you also hedging out? Comment below.