Historic Bitcoin Supply Shift Amid Fed Rate Cut Uncertainty

Bitcoin (BTC) recorded one of the largest supply movements in its history, with over 8% of the total cryptocurrency changing hands in the past week, signaling a potential turning point in market dynamics. Joe Burnett, analyst and Director of Bitcoin Strategy at Semler Scientific, described this as one of the most important on-chain events in Bitcoin’s history, drawing parallels to previous significant shifts in March 2020 (when BTC traded near $5,000) and December 2018 (around $3,500), both of which preceded accumulation phases that led to new all-time highs.

However, Burnett highlighted that up to half of this supply movement may be linked to a Coinbase wallet migration announced recently, which moderates the event's overall magnitude. Meanwhile, the broader crypto market remains on a knife's edge due to the upcoming U.S. Federal Reserve interest rate decision on December 10. Nic Puckrin, digital asset analyst and co-founder of The Coin Bureau, emphasized that the Fed holds the key to whether the market experiences a Santa rally or a Santa dump, with the press conference expected to keep traders anxious.

According to the CME Group’s FedWatch tool, markets are pricing in an 82% chance of a 25 basis point rate cut, up from 50% the previous week, fueling Bitcoin's recovery from $81,000 to $87,000. This high supply turnover, combined with macroeconomic uncertainty, places Bitcoin at a critical juncture that could define market direction in the coming weeks.