Bets on Bitcoin’s upward movement and BTC price action designating the present range as its macro bottom are growing.
On January 7, Bitcoin BTC tickers down $23,906 and traded nearer $17,000 following a jump upward at the close of the year’s first trading week.
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All eyes on CPI
BTC/USD was tracked by Cointelegraph Markets Pro and TradingView data when it momentarily crossed $17,000 the day before.
Fresh economic data from the United States had caused the pair to briefly experience volatility, but this quickly subsided, leaving the crucial level “unflipped” as resistance.
However, the small increase resulted in Bitcoin reaching its highest price since December 20.
Market players responded by continuing to anticipate the U.S. Consumer Price Index (CPI) release for December on January 12 as a significant potential driver for risk assets.
“Unemployment will increase during the next few months. In part of a summary tweet on January 6, Michal van de Poppe, founder, and CEO of trading company Eight stated that if CPI is low, yields would go off a cliff.
Finally, it appears as though BTC is prepared to leave the $16K–$17K base region in which it has been trapped for the previous few weeks. Start the squeeze, the optimistic trader Kaleo said.
Futures analyst Satoshi Flipper said that should the CPI report come in below 7%, which would indicate that inflation is declining more quickly than anticipated, it might spark a move to multi-month highs above $19,000.
Data reveals the extent of on-chain losses
Zooming out, coworker trader and analyst Rekt Capital added their voice to the increasing belief that the current BTC/USD trading range’s tight range will eventually create the next macro bottom zone.
According to him, “the present BTC price movement will probably play a significant part in the construction of the Bear Market bottom Accumulation Range.”
By showing that Bitcoin has had its second-largest realized cap fall, on-chain analytics company Glassnode further illustrated the suffering already being experienced by holders.
The fall in the realized cap, which is defined as the total price at which the Bitcoin supply last changed, is due to realized losses from selling.
Checkmate, the primary on-chain analyst for Glassnode, wrote accompanying a chart, “The 2022–23 Bitcoin Bear Market has witnessed the Realized cap decline of -18.8%, the second greatest in history, and only exceeded by the pico-bottom of the 2011 bear.”
Traders believe Bitcoin will develop bullish momentum
Let this essay serve as a means of disseminating to all cryptocurrency enthusiasts some favorable outlooks that traverse the professional forecasts for the price movement of bitcoin.
I’m specifically talking about the predictions made by industry professionals on the changes that Bitcoin price action tends to take. In this regard, trader Kaleo is among the most upbeat, claiming that BTC is poised to depart the base range of 16,000 to 17,000 dollars.
Although the price has turned into a stagnation zone between $16,000 and $17,000, which signals that a major breakout of this zone might occur in the upcoming weeks, I think that this will not be what we will see in those weeks and that the price will instead continue to lateralize in this zone.
Rekt Capital, a fellow trader, and analyst appears to have joined the growing opinion that the current limited trading range in the BTC/USD pair is establishing the next lower macro zone, based on William Suberg’s briefing note in Cointelegraph.
Beyond these encouraging opinions, though, I believe that Bitcoin’s price movement will continue to move sideways until a favorable macroeconomic event takes place.
Analysis of on-chain stablecoin data reveals a decline in USDT dominance
According to on-chain statistics given by Glassnode and examined by CryptoSlate, Tether (USDT) had a global stablecoin dominance of 89% in 2019 but has subsequently dropped to slightly under 50%.
Other stablecoins like USD Coin (USDC) and Binance USD (BUSD) started to gain popularity in 2020 and 2021, with USDC dominating the market with 33% and BUSD with 16% respectively. DAI stayed the same, on the other hand.
Recovery on the horizon
USDT had $20 billion in redemptions in May, although it has recently started to rebound. Stablecoin growth decreased after reaching a record of $24 billion in daily inflows. Even if they rose, outflows only reached a height of $8 billion, showing that the majority of the capital is still in stablecoins.
The only stablecoin that has experienced higher highs in daily transactions and is still in high demand is USDT.
Total stablecoins on exchanges
Stablecoins are valued at over $40 billion and have been redeemed for a total of $4 billion in only one week. This shows that investors still have faith in stablecoins and are most likely watching for the next upswing or downturn.
Analysis of the STBL virtual asset Glassnode data, which compiles information from all ERC20 stablecoins, reveals that stablecoin growth was rapid up until March when daily redemptions peaked at $24 billion.
Risk-on to Risk-off
Stablecoin inflows this year have changed to outflows in a risk-off climate, however, the outflows have been minimal, only amounting to a maximum of $8 billion. Despite this, stablecoins continue to hold the majority of the capital.
Over the same period, USDC climbed by 10%, and today it is up to 33%. It reached a high of 38% in June, sparking rumors that the USDT would reverse course.
BUSD, on the other hand, didn’t take off until the second half of the year, when it had a 10% market share. Since then, it has expanded to 16% domination and has been gaining traction, especially in the wake of FTX’s demise.