Bull or Bear Market?
Bitcoin’s price may take longer to rally or bottom as stablecoin liquidity growth is not yet in full swing.
Bitcoin (BTC) is currently at a critical point that may determine whether its price bottoms out or falls further as it did in the summer of 2021.
While some indicators suggest that the leading crypto asset has reached the bottom of its latest correction, other indicators suggest that market participants may face more bloodshed and pain.
Bitcoin at a critical point
Bitcoin’s price may take longer to rally or bottom as stablecoin liquidity growth is still not in full swing. Historically, when more liquidity enters the cryptocurrency market through Tether (USDT) minting, prices rise. However, this condition has not been met as USDT market capitalization growth is still slowing.
USDC’s market capitalization, on the other hand, is growing by 5.6% per month. Regardless, Tether’s slow growth suggests that BTC may not rise anytime soon. The Profit and Loss Index signal is hovering above its 365-day moving average; a break below this level is usually associated with a major correction or the beginning of a bear market.
Additionally, if prices plummet further, CryptoQuant’s Bull-Bear Market Cycle Indicator could flip to bearish. The indicator has been at its lowest bullish level since early 2023, and a bearish reversal could trigger further declines in the short term.
On the contrary, large Bitcoin investors are now losing money. New large investors have lost nearly $1 billion since BTC fell to a four-month low of $53,000 a week ago. Investors selling their holdings at a loss usually means that the price has bottomed.
Bitcoin traders are also experiencing negative margin, and this group of investors will only realize losses if they continue to sell their positions. Traders’ unrealized margin is currently 17%, the largest negative since the bankruptcy of cryptocurrency exchange FTX in November 2022.
It is also worth mentioning that the holdings of Bitcoin whales and large investors increased by 6.3% month-on-month, which is the fastest rate since April 12. This is a sign of growing demand for Bitcoin, which usually has a positive impact on prices.
While miners are still capitulating, the direction of BTC remains to be seen.
If you have investment intentions in the near future, come and communicate with me; the blogger has selected some high-quality coins that are about to explode.
Click the avatar to follow, and the spot and contract strategies will be shared free of charge.
I will do my best to lead you through the ups and downs of the market and find your investment path.
