As a seasoned researcher with extensive experience in the cryptocurrency market, I strongly believe that stablecoin liquidity, particularly USDT, plays a pivotal role in Bitcoin’s price performance. Having closely monitored the market trends and analyzed various data points over the years, I have observed a significant correlation between the two assets.
Over the past week, Bitcoin‘s price has rebounded strongly, surging by an impressive 16.25% and momentarily touching the $67,000 threshold. Optimistic investors anticipate further price increases and a potential bull market, fueled by the Bitcoin halving event in April. Nevertheless, the future growth of Bitcoin’s price may depend on various elements, most notably the stability of the liquid stablecoin market.
Why A Stagant USDT Liquidity Is Harmful To Bitcoin?
Last Friday, in a post on CryptoQuant’s platform, the well-known on-chain analytics provider highlighted the significance of ample stablecoin liquidity for Bitcoin’s price growth. According to their analysis, for Bitcoin to continue gaining value, an equivalent increase in the market share of stablecoins is essential.
Related Reading: Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why
Stablecoin liquidity, especially USDT, needs to pick up for #Bitcoin prices to rise further.
USDT market cap growth is near 0%, down from 6.6% in March when Bitcoin topped $70K.
Faster growth in stablecoin liquidity is crucial for continued price increases.
— CryptoQuant.com (@cryptoquant_com) July 19, 2024
Stablecoins are a category of cryptocurrencies that maintain a constant value, typically pegged to assets like the US dollar. The combined worth of these stablecoins amounts to $163.56 billion and plays a significant role in digital asset acceptance for investors wary of price fluctuations. Among stablecoins, Tether (USDT), with a market capitalization of $113.78 billion and the third-largest cryptocurrency by value, is often highlighted by CryptoQuant as having considerable influence on Bitcoin’s price trends.
As a crypto investor, I’ve noticed that USDT’s growth in the last month has only been around 1.03%, implying a modest 3.21% rise in Bitcoin’s price during the same period. In contrast, USDT saw a significant increase of 6.6% in market shares back in March 2024. Coincidentally, this was also when Bitcoin surged from $61,168 to hit its new all-time high at $73,750.
The substantial role of USDT in crypto markets may explain the connection between it and other assets, such as Bitcoin. When there is ample USDT availability, traders can boost their purchases of riskier assets like Bitcoin, leading to an uptick in demand. Based on CryptoQuant’s analysis, the Bitcoin market needs a significant surge in stablecoin liquidity to sustain its positive price trend.
Analyst Highlights “Dangerous” BTC Price Level
As a seasoned crypto analyst with years of experience in following Bitcoin’s price movements and market trends, I cannot help but share my concerns as I watch the current price rally. While it’s true that Bitcoin has shown impressive gains in the last day, trading at $66,571 with a notable 4.65% increase, the price must not slip below the crucial support level of $66,385.
Read More
- CORE PREDICTION. CORE cryptocurrency
- Top gainers and losers
- SYS PREDICTION. SYS cryptocurrency
- KUNCI PREDICTION. KUNCI cryptocurrency
- BTC PREDICTION. BTC cryptocurrency
- CFG PREDICTION. CFG cryptocurrency
- Best coins for today
- DOGE PREDICTION. DOGE cryptocurrency
- THOR PREDICTION. THOR cryptocurrency
- STFX PREDICTION. STFX cryptocurrency
2024-07-20 15:04