As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed numerous bull and bear cycles, and the current scenario presents a unique blend of both. The recent recovery of Bitcoin above $58k, coupled with the surge in stablecoins supply on crypto exchanges, suggests a potential bullish breakout ahead.
On August 16, the price of Bitcoin (BTC) rebounded above the significant support of $58,000, having briefly flirted with $56,000 the day before. This leading cryptocurrency seems to be hinting at a possible bullish surge in the near future, thanks to last week’s sudden exit of leveraged traders, suggesting a potential breakout.
Additionally, significant worldwide stock markets, spearheaded by the NIKKEI 225, experienced a surge of 3.64% on Friday. This positive trend follows a bullish rebound from the overall market decline that occurred last week.
Stablecoins Supply on Crypto Exchanges on the Rise
Ever since the massive market crash known as Black Monday on August 5, insurance providers of stablecoins have minted over $1.5 billion and deposited them into various centralized exchanges. Based on historical trends, an increase in the supply of stablecoins on these centralized platforms is typically associated with a positive (bullish) market outlook, while a decrease might indicate a bearish trend.
Based on an analysis of blockchain data, it’s been found that a leading crypto liquidity provider, Cumberland, has obtained approximately 1.28 billion US Dollars worth of stablecoins (issued by Tether) through the Ethereum network. Interestingly, around 1.23 billion USD have been transferred from Cumberland to various exchanges. In the last 24 hours, Cumberland has deposited about $320 million into different centralized cryptocurrency exchanges (CEXs), which they received from Tether’s Treasury.
Specifically, a sum of approximately $639 million was transferred into the account of Coinbase Global Inc. (NASDAQ: COIN) on behalf of institutional investors. Meanwhile, an amount equivalent to around $288 million was forwarded by Cumberland to Kraken for their clients, and roughly $180 million was sent to the OKX crypto exchange.
Today, I’m excited to share that Circle Internet Financial, the issuer behind my stablecoin investment, USDC, produced 250 million USDC on the Solana network. Since April, this figure adds up to a whopping 4.5 billion USDC minted on Solana. This significant expansion has noticeably boosted the overall liquidity, particularly for meme coins, making my investment more fluid and accessible.
Due to recent trends, the amount of stablecoins available on centralized platforms has hit a fresh peak over several months, mirroring increased purchasing ability.
Currently, stablecoins on all exchanges are reaching historically high levels.
IMO, buying power will become stronger than ever in the near future.#BTC #Bitcoin
— 우민규 (Woominkyu) (@Woo_Minkyu) August 16, 2024
Economic Outlook
After the recent stock market drop, caused by leveraged investments between the Japanese Yen and other significant worldwide currencies (known as carry trades), traders are being careful about potential future weakness. Moreover, historically, August and September have shown bearish trends for the cryptocurrency sector, followed by a generally optimistic forecast in the last quarter of the year.
As a crypto investor, I’m keeping a close eye on the upcoming speeches – one by Bank of Japan’s Governor Kazuo Ueda before parliament on August 23, and another by Fed Chair Jerome Powell at Jackson Hole. These speeches hold significant weight as they both coincide and offer valuable insights into the economic outlook, which undeniably affects my investment decisions.
Furthermore, it’s anticipated that the U.S Federal Reserve will lower its interest rate for the initial time since the onset of the Covid-19 pandemic in September.
Midterm BTC Price Expectations
Currently, I anticipate our “green safety area” will remain stable. However, it’s possible we might experience some volatility or fluctuations over the next few days.
In simpler terms, we bought ahead of the local demand during the recent price increase. Once this excess is cleared out, we can expect a potential rise towards 63k. However, as long as the price remains below that level, there should be some resistance…
— CrediBULL Crypto (@CredibleCrypto) August 16, 2024
For the past five months, Bitcoin has been stuck in a corrective phase. However, it seems poised for a significant bullish surge before the year ends. Technically speaking, if Bitcoin drops below its current support level of $56k to $58k, it might dip towards $48k temporarily before regaining momentum and reaching a fresh record high.
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2024-08-16 12:45