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What is the Key to Bitcoin’s Next Bull Rally? Analysts Chip In

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によって

Bitcoin’s price has stagnated since its March peak due to tight U.S. monetary policy, which has reduced stablecoin supply, according to CryptoQuant analysts.

“The reason for Bitcoin’s inability to rally further is fundamentally due to the tightening monetary policy in the U.S. since March 2022,” they reported on July 3.

As a result, the overall stablecoin supply started to decline in early 2022 when the Federal Reserve started raising interest rates.

Conditions for $BTC to Rise: Stablecoin Liquidity

“The bottom line is that in order for #ビットコイン to rally in earnest, we need to see an increase in stablecoin liquidity and circulating supply” – By @MAC_D46035

Read more https://t.co/2XfjofHghh pic.twitter.com/uCNtzLvi2l

— CryptoQuant.com (@cryptoquant_com) July 3, 2024

US Monetary Policy Impact

Stablecoin supply started to climb again in late 2023, but rates have remained stubbornly high at over 5% for over a year.

The analyst noted that BTC has been rising due to an expectation of lower interest rates and fiscal policy bringing liquidity to markets.

They concluded that an “increase in stablecoin liquidity and circulating supply through more accommodative monetary policy in the U.S.” is necessary for Bitcoin to enter a bull market.

Until then, Bitcoin may continue to trade sideways or correct, suggesting investors should adopt a long-term perspective.

Lower interest rates mean that cash is less attractive as an investment and high-risk assets such as crypto or tech stocks become more attractive.

The Fed is expected to lower interest rates in September, providing economic data remains positive.

Bitcoin has oscillated between the high $50K level and the low $70K level for the past four months.

Stablecoin Ecosystem Outlook

Stablecoin market capitalization has steadily increased over the past few months. It currently stands at $161 billion, representing around 7% of the total crypto market. This is less than half of what it was at its peak in 2022.

Tether remains the market leader by a clear margin, with a market share of almost 70%. Moreover, the USDT supply is currently at an all-time high of $112 billion.

Its closest competitor, Circle, has a market share of around 20% with a circulating supply of $32.5 billion. Maker’s DAI is the third largest stablecoin with a $5 billion market cap and a share of just over 3%.

In June, Circle CEO Jeremy Allaire predicted that stablecoins could account for 10% of “global economic money” within the next decade or so.

ポスト What is the Key to Bitcoin’s Next Bull Rally? Analysts Chip In に初登場した。 クリプトポテト.


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