Bitcoin Holds Despite Large Holders Depositing BTC To Exchanges

Hello and welcome to this week’s edition of Overbit Weekly Round Up.

We kick off with some big news out of Capitol Hill as cryptocurrency executives head to Washington D.C. for talks with regulators on the nascent technology.

Six prominent cryptocurrency businesses, including Coinbase and Circle, asked Congress on Wednesday to give more specific laws for the expanding $3 trillion markets but cautioned that excessively harsh regulations might drive it offshore.

“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations,” warned Alesia Haas, chief executive of Coinbase Inc.

The hearing before the U.S. House of Representatives Financial Services Committee was the first time the industry’s top executives described their operations to legislators in the United States, amid mounting fears that cryptocurrencies might pose systemic risks and harm investors.

Instead of pushing the sector to conform with existing regulations, crypto executives have repeatedly called for cautious, tailored guidelines. According to commentators, Congress is unlikely to pass new crypto legislation anytime soon, and the session was mainly used to gather information.

For example, Senator Elizabeth Warren and Securities and Exchange Commission Chair Gary Gensler are concerned that the items might be used for illegal reasons or to take advantage of unwary consumers. However, some politicians, especially Republicans, commended the businessmen and women for pioneering what may be a game-changing technology.

“I am tremendously impressed. I see a lot of ingenuity, a lot of entrepreneurial spirits,” said Representative Pete Sessions, a Texas Republican. “We need to be supportive of you.”

Regulators are concerned that the fast expansion of cryptocurrencies, particularly stablecoins (digital assets tied to existing currencies), might jeopardise the financial system if not adequately controlled.

Closing out this week’s edition, we take a look at one headline examining how big BTC wallets are behaving during the so-called ‘omicron crash’.

On Dec. 5, on-chain analytics firm CryptoQuant warned that significant volume moves on exchanges were increasing again in its daily QuickTake market updates. Data suggested that another Bitcoin price drop is still possible according to large-volume trading moves. Bitcoin whales could be preparing to sell at any time as the price of bitcoin hovered around $47,000.

“Whales are still depositing BTC to exchanges. Exchange Whale Ratio reached over 95% again,” CryptoQuant commented. “Taker Buy Sell Ratio remains negative, indicating the futures market sentiment is bearish.”

CryptoQuant’s exchange whale ratio statistic revealed that significant Bitcoin investors were not taking any chances with short-term price activity. The highest inflows and outflows from exchanges are compared to overall inflows and outflows to determine the exchange whale ratio.

As Cointelegraph previously reported, open interest on futures exchanges plummeted after last week, but the question remains if the flushing out was sufficient to prevent more price declines. Though it’s still too soon for an answer, given the relative strength of Bitcoin now back above $50,000 and the positive Capitol Hill meeting by cryptocurrency executives, things are certainly looking up again for the industry.

That’s all for this week’s edition of Overbit Weekly Round Up. Thanks so much for reading, and take care until next time!

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