Bitcoin’s Upward Momentum Faces Obstacles, CryptoQuant Analyzes Market Factors
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Recent insights shared by CryptoQuant, a renowned on-chain analytics platform, reveal that Bitcoin’s ascent may hit a few roadblocks in the coming months. While there’s still potential for further price increases, CryptoQuant sheds light on some key factors that could hinder BTC’s upward trajectory.
During major bull markets, BTC’s price has often surged along with an increase in BTC holdings by US institutional investors. It’s been a recipe for success. However, in recent months, CryptoQuant’s data suggests that these institutional investors have been quietly reducing their BTC holdings.
The cause? It seems they’re venturing towards global exchanges and decentralized exchanges (DEXs) in response to the Securities and Exchange Commission’s (SEC) crypto market regulations.
Meanwhile, stablecoins have played a pivotal role in the crypto market, acting as a bridge between fiat currencies and digital assets. They’ve provided stability amidst the volatile seas of crypto trading. But here’s the twist: the total supply of stablecoins has been experiencing a downward spiral.
After soaring to a staggering $99 billion in February 2022, the supply has gradually dwindled to $71.1 billion. This decline indicates a reduction in the overall buying power of the market. With less ammunition in their wallets, crypto enthusiasts might find it challenging to fuel BTC’s upward momentum.
Change in Bitcoin’s Token Transfer Indicator Highlights the Absence of Smart Money: CryptoQuant
CryptoQuant’s eagle-eyed observation reveals a lack of significant changes in the BTC Token Transfer indicator, suggesting that new smart money players are yet to make a grand entrance. In simpler terms, there’s been a dearth of big-shot investors pouring substantial resources into Bitcoin lately.
So, while the recent price movements may seem like a rollercoaster fueled by supply and demand dynamics, the absence of new players has left market watchers wondering when the big guns will join the party.
Beyond the specific crypto realm, macroeconomic factors have a knack for throwing curveballs at the market. CryptoQuant wisely points out that Bitcoin’s potential for continuous ascent could face challenges due to an anticipated recession in the latter half of the year.
If the economy takes a nosedive, it could trigger widespread asset price crashes, putting a damper on Bitcoin’s growth. As a result, the trajectory of BTC might not mirror the smooth, uninterrupted climb witnessed back in 2015.
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