Stablecoin Supply Rising, Diminishing Bitcoin Reserves Ready To Fuel Next Leg Up

Tony "The Bull" Severino

Last Updated: June 11, 2024 2:14 pm

3 mins read

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Bitcoin price is back in the mid-$50,000 range, unable to push any lower despite bears best efforts and overheated technical indicators pointing to a potential trend reversal. However, several fundamental factors are proving to be too strong, and are setting the stage for the next leg up in the ongoing cryptocurrency bull trend instead.

Here’s what rising stablecoin supply says in the face of diminishing BTC reserves on exchanges, and what it could mean for all of crypto.

Fundamental Factors Have Fueled The Cryptocurrency’s Recent Rise To Stardom

Cryptocurrencies, like all free markets, are driven by the dynamic forces of supply and demand. Other factors, such as regulatory, political, environmental, and economical issues can also have a dramatic impact.

Two examples of one extreme or another, include the Black Thursday market crash due to pandemic panic, and the polar opposite move to the upside due to a BTC supply shock.

Bitcoin has grown significantly, driven by bullish fundamentals | Source: BTCUSD on TradingView.com

A shift in avalaible supply and increasing demand for Bitcoin, has brought the price per coin to more than $60,000 at the high. Technicals have been mostly overheated the entire way up, and are reaching a boiling point.

Yet prices still aren’t falling any deeper than the mid-to-low $50,000 range, and it could be due to just how strong fundamental factors are currently.

The Bullish Factors Keeping Bitcoin Afloat, Another Leg Up Possible

Among the factors keeping Bitcoin price action afloat despite technical momentum indicators turning sharply down, is the continued lack of BTC on crypto exchanges. The liquidity crisis that has driven up prices so far, remains a vital factor in the buoyancy.

Related Reading | This Bitcoin Metric Says The Top Is Still 350% Away

Next, stablecoin supply has been steadily rising again, one of the primary factors behind each bullish impulse on the way up. Quant analysts have said that fresh USD was necessary to push higher, however, an increase in stablecoins could shift more capital into Bitcoin, and have a similar impact.

Stablecoin reserves continue to rise while BTC held on exchanges drops further | Source: CryptoQuant

If the leading cryptocurrency by market cap can sustain the current support levels and keep several bearish technicals at bay, then another leg up is the only way ahead. A continued rise could squeeze shorts at current all-time highs, causing prices to return to their parabolic trajectory.

If not, however, technicals will have outweighed fundamentals for the first time during the bull market, and it could result in the first more sizable correction since it all first began.

Will the increasing supply of stablecoins and low BTC reserve be enough to shake off momentum flipping bearish?

Featured image from Deposit Photos, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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