Selling pressure on Bitcoin in the near term is limited as investors have been increasingly offloading BTC from exchanges to personal wallets in October, BofA said.
The rise in correlation between Bitcoin and gold is one of major indicators demonstrating investors’ confidence in BTC amid the ongoing economic downturn, according to digital strategists at the Bank of America.
“Bitcoin is a fixed-supply asset that may eventually become an inflation hedge,” the strategists wrote. The growth in BTC/XAU correlation is not the only indicator signaling growing investors’ confidence in Bitcoin as a store of value though.Bitcoin has also been increasingly correlated with major stocks like the S&P 500 and Nasdaq 100 . The correlation between Bitcoin and both SPX and QQQ reached all-time highs on Sept.
BofA strategists also mentioned massive Bitcoin outflows from exchanges to personal or self-hosted wallets. According to the study, weekly BTC exchange outflows in early October were the largest since mid-June, marking the third consecutive week of outflows. The strategists emphasized that large and continuous outflows to personal wallets indicate limited near-term sell pressure, stating: