According to Golden Finance: Bitcoin is facing a significant hurdle in breaking its all-time high, which 10x Research attributes to a notable slowdown in stablecoin minting following the Bitcoin halving event.
Bitcoin Market Dynamics:
- Current Range: Bitcoin is currently near the top of its trading range and is struggling to break through its previous all-time high.
- Bitcoin Halving Impact: The halving event on April 20 has led to a significant slowdown in the minting of stablecoins, impeding Bitcoin's upward momentum.
Stablecoin Trends:
- Stablecoin Minting Decline: There has been a marked decrease in the issuance of new stablecoins post-halving.
- Large Wallet Holding Decline: The number of wallets containing more than $10 million in stablecoins has also declined, indicating reduced liquidity inflows into the Bitcoin market.
Exchange Withdrawals:
- Significant Withdrawals: Over the past month, approximately $6.75 billion worth of Bitcoin (about 97,000 BTC, nearing 100,000 BTC) was withdrawn from exchanges.
- Affected Exchanges: Major withdrawals were observed from U.S.-focused exchanges, including Kraken (down 55,000 BTC or $3.8 billion) and Coinbase (down 24,000 BTC or $1.7 billion).
The reduced minting of stablecoins and the decline in large stablecoin wallet holdings suggest that the liquidity available for purchasing Bitcoin has decreased, constraining demand and price growth. The significant withdrawal of Bitcoin from exchanges further indicates that investors may be moving their assets to cold storage, possibly reflecting a cautious or long-term holding strategy rather than immediate trading.
Bitcoin's struggle to break through its all-time high can be attributed to several factors, including the post-halving slowdown in stablecoin minting and substantial withdrawals from major exchanges. As these factors contribute to reduced liquidity and trading volume, Bitcoin's path to reaching new price levels faces substantial challenges. Market participants will need to closely monitor stablecoin trends and exchange flows to gauge future price movements.