Bitcoin has been moving sideways since it hit a new high in March of this year. The reason for Bitcoin's inability to rally further is fundamentally due to the tightening monetary policy in the US since March '22.
As a result of this, the total circulating supply of stablecoins started to decline from the time the US raised interest rates. However, the reason why the price of Bitcoin has been rising over the past year is, first, the expectation of lower interest rates and, second, the fact that fiscal policy, unlike monetary policy, has continued to bring liquidity into the market.
The bottom line is that in order for Bitcoin to rally in earnest, we need to see an increase in stablecoin liquidity and circulating supply through more accommodative monetary policy in the U.S. Until we see these signals, Bitcoin is likely to trade sideways or correct further, and investors would be wise to take a long-term view of the market.
Written by MAC_D
