Bitcoin price is back in the mid-range of $ 50,000 and cannot push the downside despite all efforts and overheated technical indicators pointing to a possible trend reversal. However, some fundamental factors are proving to be too strong and instead prepare the ground for the next step in the ongoing bull trend in cryptocurrency.
This says the increasing supply of stable coins given the declining BTC reserves on the exchanges and what that could mean for all of crypto.
Fundamental factors fueled the cryptocurrency’s recent rise to fame
Like all free markets, cryptocurrencies are driven by the dynamic forces of supply and demand. Other factors such as regulatory, political, environmental and economic problems can also have dramatic effects.
Related reading | Bitcoin techniques are overheating, but bullish fundamentals remain unaffected
Two examples of one extreme or the other are the Black Thursday market crash due to a pandemic panic and the opposite due to an upward BTC supply shock.
Bitcoin has grown significantly on bullish fundamentals Source: BTCUSD on TradingView.com
A shift in the available supply and increasing demand for Bitcoin has brought the price per coin to over $ 60,000. The tech has mostly overheated and reached a boiling point the entire way.
However, prices are still not falling any lower than the mid-to-low range of $ 50,000 and it could be because of how strong the fundamentals are right now.
The bullish factors keeping Bitcoin afloat another leg up possible
One of the factors keeping Bitcoin price movement alive despite sharply declining technical momentum indicators is the persistent lack of BTC on crypto exchanges. The liquidity crisis, which has so far driven prices higher, remains a key factor in the boost.
Related reading | This bitcoin metric says the top is still 350% away
Next, the supply of stable coins has risen steadily again, one of the main factors behind any bullish impulse on the way up. Quant analysts said a new USD was needed to push higher. However, increasing the stable coins could shift more capital into Bitcoin and have similar effects.
Stablecoin reserves continue to rise, while BTC held on exchanges continues to decline Source: CryptoQuant
If the leading cryptocurrency by market cap can maintain current levels of support and keep multiple declining technicals in check, one more step up is the only way forward. A sustained spike could push short positions to current highs and cause prices to return to parabolic course.
If not, the technical data will have outweighed fundamentals for the first time during the bull market and this could lead to the first major correction since it all began.
Will the increasing stablecoin supply and low BTC reserve be enough to shake off the declining momentum?
Featured image from deposit photos, charts from TradingView.com