Bitcoin (BTC) continues to hover in the $29,000 range for the week despite brief breaks up and down to $30,100 and $28,600. Thus, the market’s desire to get out of this price zone is obvious, although it has not yet gained strength to direct the direction.
According to market analyst Juan Rodriguez, ‘Now we need liquidity’ to drive growth bitcoin. As shown in the chart below, the total supply stablecoins it has been declining since it peaked 18 months ago.
In the market, when the supply of stablecoins rises, it is believed that investors increase their holdings in these cryptocurrencies to protect against high volatility. Instead when it goes down reflects the possibility that they dumped their stablecoins to buy crypto assets..
This partly explains the rise in the price of bitcoin since the end of last year, when the supply of stablecoins decreased. And, in turn, this means that there is currently less liquidity in the market, meaning the availability and ease of buying volatile crypto assets like BTC.
Bitcoin reached its yearly high of $32,000 last month and has since unraveled the rise to $29,000 where it is now.
BTC Needs Catalysts to Fight Current Bearish Pressure
Given this scenario, Rodriguez warns that a “trigger” is “needed” to spur growth, which could be one of the following two factors. On the one hand, the approval of the first bitcoin spot exchange-traded fund (ETF) in the United States needs to be accelerated. And on the other hand, the resolution of requirements for the cryptocurrency ecosystem in this country.
Regarding the first mentioned factor, the analyst believes that the authorization of the ETF, which more and more likely This could reportedly happen in the first quarter of 2024. “This will be the main catalyst for the price of bitcoin,” he said. and kept it could be pushed back to the last quarter of 2023 if Grayscale wins its lawsuit against the SEC. (Commission on Security and Exchange).
As reported by CriptoNoticias, Grayscale is one of the asset managers who have applied to launch Bitcoin spot ETFs in the past and have been rejected. This led the company to appeal the revision by filing a lawsuit with the SEC and restarting its application.
Regarding the second factor, Rodriguez clarified that if the lawsuits about alleged illegal activities that the Binance and Coinbase exchanges in the United States are facing are resolved positively, then this could also be a catalyst for the price of bitcoin, as it was. .
For now, while these lawsuits remain unresolved, they put downward pressure on the price of bitcoin, in contrast, Rodriguez. In addition, he mentioned that it also depends on the fact that August and September have historically been the months that mostly brought losses.
Added to this by a market analyst Michael van de Poppe He commented that while bitcoin is showing strength at $29,000, some altcoins are falling, which “shows that there is no confidence in the markets”.
Van de Poppe suggests that if Bitcoin loses $29,000 in such a scenario, then the coin will experience $27,800–$28,000, where it traded for most of 2023. there.
On the other hand, the analyst known as ImmortalCrypto He stated that “every day below $30,000 is a good day.” He explained that this is because, by hesitating at the close, the market will find an opportunity to break out of this zone.
In parallel, a trader calling himself Crypto Tony recalled that after the start of an uptrend, there is usually a price correction followed by a “bullish bomb” (big rise). Therefore, a fall of 20-30% in the fourth quarter of the year and a greater appreciation in the long term are not ruled out.