Bitcoin (BTC) $96,738.3It recovered quickly after falling below 90 thousand dollars at the beginning of the week. Along with the largest cryptocurrency, there was also a recovery in altcoins. However, there are question marks about the sustainability of this recovery. If the US inflation data to be announced today is higher than expected, a new wave of decline may hit the cryptocurrency market.
Stagnation in Stablecoin Supply Points to New Lack of Liquidity
Despite Bitcoin’s rise stablecoin marketThe stagnation in the country attracts attention. According to Glassnode data USDT, USDC, BUSD And DAI‘s total supply is fixed at approximately 189 billion dollars. Total supply has seen a change of only 0.37 percent in the last 30 days. Stablecoins are often used for cryptocurrency purchases and are an important indicator of new liquidity entering the market.
glassnodeEvaluating the current situation on the stablecoin side, he said, “The fact that the rally at the end of 2024 requires more capital inflow compared to previous periods shows that speculative demand and liquidity-based momentum have decreased.”
During the November-December rally stablecoin An increase of 27.3 billion dollars was recorded in its supply. This increase contributed to the rise of Bitcoin from 70 thousand dollars to 108 thousand dollars. However, in the first quarter of 2024, this figure was only $14.68 billion.
US Inflation Data is Critical
US Consumer Inflation (CPI) data to be announced today at 16.30 GMT cryptocurrency marketwill determine the course of events. Market expectation is for an increase of 0.3 percent on a monthly basis and 2.9 percent on an annual basis in December. Core inflation is expected to be announced at 3.3 percent annually.
Inflation data that will exceed expectations US Federal ReserveIt may increase concerns that the Fed will be more cautious in reducing interest rates. This scenario could reinforce the impact of high unemployment data, which was one of the main reasons behind Bitcoin’s decline last week.
The stagnation and lack of liquidity in the stablecoin market prevents the price of Bitcoin from rising sustainably in this process. If the inflation data to be announced exceeds expectations, this pressure on the market may become even stronger.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
