Bitcoin Record Largest Outflows Since FTX Crash, Just Ahead of Powell Testimony

Bitcoin (BTC) investors are withdrawing their holdings from crypto exchanges at an unprecedented rate, reaching levels not seen since the collapse of FTX in 2022.

Record Outflows Precede Major Bull Runs — Can History Repeat?

According to data from CryptoQuant, over 47,000 BTC (worth approximately $4.6 billion) left exchanges on Feb. 5, 2025. That amounts to a 3% drop in Bitcoin’s supply on exchanges, indicating that traders are moving their holdings into private wallets, likely for long-term holding.

Historically, major Bitcoin outflows have often preceded large price surges. For instance, a similar pattern was observed in July 2024 and November 2022, when large withdrawals followed a 125% and 100% rally in the Bitcoin market, respectively.

It suggests that whales (large investors) and institutions may be accumulating Bitcoin in anticipation of another move higher, pointing to strong inflows into Bitcoin-specific exchange-traded funds (ETF) in the US.

Inflation Data, Powell Testimony’s Impact on Bitcoin Market Sentiment

Economic data and monetary policy could influence Bitcoin’s next major move. A recent University of Michigan consumer sentiment report revealed that Americans now expect inflation to rise 3.3% annually over the next five to ten years—the highest level since 2008.

This increase in inflation expectations is largely due to concerns over potential tariffs from the incoming Trump administration, which could drive up costs. If inflation remains elevated, the Federal Reserve may delay or slow down interest rate cuts, keeping borrowing costs high.

Why does this matter for Bitcoin?

• Higher interest rates make traditional assets (like bonds and savings accounts) more attractive, potentially reducing demand for Bitcoin.
• Lower interest rates, on the other hand, increase liquidity in financial markets, which has historically benefited Bitcoin.

Traders are now focused on Powell’s upcoming speech, as any hints about future interest rate policy could impact Bitcoin’s trajectory. Note that Bitcoin has rallied strongly even during the Fed’s interest rate pause in 2024, primarily because of anticipation of a pro-BTC Donald Trump administration.

Bitcoin Strategic Reserve Hopes Will Likely Keep BTC From Sliding Sharply — Watch Out For The Gold Fractal

If Trump announces a Bitcoin strategic reserve in the coming weeks or months, it could offset rate pause risks to rally further, given the cryptocurrency would likely attain a safe-haven status similar to gold.

Trade analyst Doctor Profit said on X that Bitcoin’s close resemblance to gold’s price trends on smaller timeframes could lead BTC prices to the $125,000-$135,000 range next.

“Bitcoin would only need 28 days to break out from phase two of the sideways movement, but this has not happened yet,” he said, adding:

“We can clearly see that Bitcoin is following Gold, giving us valuable insight into where things might head next.”

Technical Outlook: Is Bitcoin Poised for a Breakout?

Despite the massive outflows, Bitcoin’s price action remains range-bound between $95,000 and $107,850. The cryptocurrency has struggled to break out of this zone since rebounding from the global market sell-off on Feb. 3.

From a technical analysis perspective, Bitcoin remains range-bound but is testing key levels:

• If Bitcoin breaks above $107,850, it could confirm a bullish breakout, potentially targeting higher levels.
• If Bitcoin drops below $95,000, it might signal weakness, increasing the risk of further declines.

Chart patterns suggest that Bitcoin consolidates within a flag formation, often considered a bullish continuation pattern. If it breaks out of the flag pattern to the upside, its likelihood of rising toward $150,000 will be higher.

The projected move is measured by adding the height of the previous uptrend to the potential breakout point, which is around $107,850.