As an experienced analyst, I believe that the current state of the crypto market is cause for concern. The lack of bullish momentum, as evidenced by weak whale demand growth and low stablecoin liquidity, suggests that we may be in for a prolonged period of price volatility.
The cryptocurrency market is experiencing losses, with Bitcoin (BTC) and other altcoins contributing to the red ink. At present, there’s a lack of bullish energy, and Bitcoin is flirting around crucial thresholds, dropping below the average price that traders paid for their holdings ($65,800).
Regardless, CryptoQuant analysts insist in a recent report that the market is in a bull season.
Lack of Bullish Momentum
As a crypto investor, I’ve noticed that the bullish momentum in the market seems to be lacking based on the weak growth in demand from large Bitcoin whales and the low stablecoin liquidity. My own analysis shows that the demand from big BTC holders has been growing at a monthly rate of 4.8%, which is slightly higher than the 2.4% seen in late May, but still significantly lower compared to the 6%-10% we witnessed during the first quarter of this year when Bitcoin reached its all-time high.
Traders’ interest in Bitcoin (BTC) hasn’t been revived yet based on on-chain data, implying they aren’t buying the asset currently. This group of investors has been gradually reducing their holdings since Bitcoin reached $70,000 in late May.
The supply of stablecoins, which tends to rise during price increases, has recently reached its lowest point since November 2023. For instance, Tether’s (USDT) market capitalization growth over the past 60 days has decreased significantly from $12.6 billion in late April to just $3.7 billion currently. A more ample stablecoin liquidity is essential for the crypto market to experience further price escalations.
BTC Could Hit $60K
The interest from US investors in buying bitcoin and ether (ETH) remains low, as indicated by the Coinbase Premiums for both digital currencies staying in the negative territory since May 2021. A key factor influencing the prices of BTC and ETH is the expansion or contraction of demand from US investors.
As a crypto investor, I’ve noticed that the weak demand from U.S. investors is evident in spot Bitcoin exchange-traded funds (ETFs). These ETFs have been experiencing an outflow trend since June 13. In fact, they’ve collectively lost over $100 million each day in the past week when I check the market data.
According to CryptoQuant, their Bull-Bear Market Cycle indicator is currently showing a downward trend, implying that we’re still in a bull market, but with minimal signs of significant price gains. The index has reached its lowest point since October 2023 and sits below its 30-day moving average. A crossover above the 30-day moving average is required for the indicator to suggest an uptick in bullish momentum.
Currently, Bitcoin (BTC) may continue to drop down to the level of $60,000 as it now hovers beneath the on-chain realization price set by traders.
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2024-06-23 20:13