Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

Cryptocurrencies

Stalled USDT Liquidity Threatens Bitcoin Price Further Growth – Here’s Why

Source Newsbtc

The price of Bitcoin has maintained a recovery trajectory over the last week, gaining by a significant 16.25% to move briefly above the $67,000 price mark. Bitcoin investors are likely hopeful the asset will record more price gains and finally embark on a bull run following the halving event in April. However, Bitcoin’s price future gains are theorized to be tied to multiple factors including the liquidity of the stablecoin market.

Why A Stagant USDT Liquidity Is Harmful To Bitcoin?

In an X post on Friday, prominent on-chain analytics platform CryptoQuant emphasized the importance of stablecoin liquidity to an appreciation in Bitcoin’s price. CryptoQuant stated that for premier cryptocurrency to experience further price increases, there is a need for an equal rise in the stablecoin market shares.

Related Reading: Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why

Stablecoin liquidity, especially USDT, needs to pick up for #Bitcoin prices to rise further.

USDT market cap growth is near 0%, down from 6.6% in March when Bitcoin topped $70K.

Faster growth in stablecoin liquidity is crucial for continued price increases. pic.twitter.com/8AJdq7TzTu

— CryptoQuant.com (@cryptoquant_com) July 19, 2024

For context, stablecoins refer to a type of cryptocurrency with a fixed value that is usually pegged to a reserve asset, usually the US dollar. These assets are combined valued at $163.56 billion and are critical to digital asset adoption for users with a fear of market volatility. In relation to Bitcoin’s price, CryptoQuant specifically references Tether (USDT), the largest stablecoin and third largest cryptocurrency with a market cap value of $113.78 billion, as a major influencing factor.

The analytics team explains that USDT’s growth in the last month has been near 0% (1.03%), thus suggesting a slight 3.21% increase in Bitcoin’s price over the same period. In contrast, USDT’s market shares grew by 6.6% in March 2024, the same time in which Bitcoin rose from $61,168 to secure a new all-time high at $73,750.

The relationship between both assets could stem from the prominent use of USDT in crypto trading. Thus, a higher level of USDT liquidity could allow traders to increase demand for risky assets, including Bitcoin. According to CryptoQuant, the Bitcoin market, therefore, requires a rapid rise in stablecoin liquidity to maintain its current positive price performance.

Analyst Highlights “Dangerous” BTC Price Level

In other news, amidst Bitcoin’s current price rally, popular crypto analyst Ali Martinez has warned that Bitcoin must maintain its price above the $66,385 level to avoid a massive liquidation of about $42.67 million. At the time of writing, Bitcoin continues to trade at $66,571 with a notable 4.65% gain in the last day. In a similar fashion, the asset’s daily trading volume is up by 38.08% and valued at $37.2 billion.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

Fed hike odds near 90% into Wednesday's decision — how to trade the dollar, gold and the S&P 500 A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.

Author Suzie

Sep 14, Mon

A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.

Bitcoin falls below $75,000 as the CLARITY Act fails in the Senate — what the vote means for crypto The US Senate blocked the Digital Asset Market CLARITY Act in a 49-50 procedural vote, sending Bitcoin briefly below $75,000 — its biggest one-day drop since June. Ethereum fell more than 8%, Coinbase slid 10% and $75 billion of crypto market value evaporated. Here is what the vote was, why it failed, and the levels that matter now.

Author Suzie

Sep 16, Wed

The US Senate blocked the Digital Asset Market CLARITY Act in a 49-50 procedural vote, sending Bitcoin briefly below $75,000 — its biggest one-day drop since June. Ethereum fell more than 8%, Coinbase slid 10% and $75 billion of crypto market value evaporated. Here is what the vote was, why it failed, and the levels that matter now.

Dollar index tops 100 for the first time since July as the Fed's hawkish dot plot sinks in The U.S. dollar index broke back above 100 for the first time since 31 July after the Fed delivered its first rate hike since 2023, with the dot plot showing 16 of 18 officials expect at least one more increase this year. Here are the levels that matter for DXY, the currencies feeling it most, and what to watch next.

Author Irene Q.

Sep 17, Thu

The U.S. dollar index broke back above 100 for the first time since 31 July after the Fed delivered its first rate hike since 2023, with the dot plot showing 16 of 18 officials expect at least one more increase this year. Here are the levels that matter for DXY, the currencies feeling it most, and what to watch next.

Gold rebounds to near $4,350 on weaker US Dollar, falling oil prices Gold price (XAU/USD) rises to near $4,345 during the early Asian session on Friday. The precious metal rebounds from a six-week low amid falling oil prices and a weaker US Dollar (USD). Traders continue to assess the latest Federal Reserve (Fed) rate hike and policy cues.

Author FXStreet

Yesterday 01: 32

Gold price (XAU/USD) rises to near $4,345 during the early Asian session on Friday. The precious metal rebounds from a six-week low amid falling oil prices and a weaker US Dollar (USD). Traders continue to assess the latest Federal Reserve (Fed) rate hike and policy cues.

US to delay new "overcapacity" tariffs on China — what the pause means for trade, inflation and the dollar Washington is expected to hold off announcing new tariffs over Chinese "overcapacity" until after the 24 September summit, according to Bloomberg. The postponed plan would have added 7.5% to Chinese goods, taking second-term US tariffs to around 20%. Here is what is on the table, and what a deal versus no deal would mean for the yuan, Hong Kong equities and the dollar.

Author Mitrade

Yesterday 07: 43

Washington is expected to hold off announcing new tariffs over Chinese "overcapacity" until after the 24 September summit, according to Bloomberg. The postponed plan would have added 7.5% to Chinese goods, taking second-term US tariffs to around 20%. Here is what is on the table, and what a deal versus no deal would mean for the yuan, Hong Kong equities and the dollar.

Popular Symbols