Bank of America Analysts See No Signs of a Broad ‘Crypto Winter’

The dynamics of moving cryptocurrencies between private wallets and exchange wallets indicate investor uncertainty about the market’s future developments in digital assets. CoinDesk reports, citing a Bank of America (BofA) report.

According to analysts, tightening of policy by the ФРС and macroeconomic factors will curb the growth of cryptocurrencies over the next six months. However, BofA stressed that this will not mark the start of a new ‘crypto winter’, given that the level of user adoption of digital assets and developer activity has risen substantially.

Analysts noted that the observed outflow of Bitcoin from exchanges points to a depletion of seller momentum. At the same time, inflows of Ethereum to exchange addresses may signal potential pressure on the price of the second-largest cryptocurrency, according to BofA.

According to the report, inflows of stablecoins onto exchanges have weakened for the second consecutive week. For the past week, the figure declined by 99% versus the previous seven-day period. This suggests that investors are not rushing to make decisions in the current conditions.

The bank added that the digital-asset market will struggle to exit its current price range until fears of a possible recession are laid to rest.

According to Glassnode data, in the past week exchange balances of Bitcoin rose by $83.9 million, Ethereum by $362.5 million, and USDT by $261.2 million.

🚨 Weekly On-Chain Exchange Flow 🚨#Bitcoin $BTC
➡️ $7.8B in
⬅️ $7.7B out
📈 Net flow: +$83.9M#Ethereum $ETH
➡️ $3.8B in
⬅️ $3.4B out
📈 Net flow: +$362.5M#Tether (ERC20) $USDT
➡️ $4.1B in
⬅️ $4.4B out
📉 Net flow: -$261.2Mhttps://t.co/dk2HbGwhVw

— glassnode alerts (@glassnodealerts) February 28, 2022

Earlier, Grayscale Investments analysts assessed the prospects for the cryptocurrency market amid the war in Ukraine. According to the specialists, bearish sentiment prevails among traders, but for long-term investors the volatility that has arisen may present a good buying opportunity.

As noted, the head of the cryptocurrency exchange FTX, Sam Bankman-Fried, also said that he expects rising demand for digital gold amid the economic instability in Eastern Europe linked to the war in Ukraine and the devaluation of national currencies.

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