Coinspeaker
Bitcoin Price Attempts Further Bullish Recovery Catalyzed by Rising Stablecoins Supply on Crypto Exchanges
Bitcoin (BTC) price quickly recovered above the crucial support level of $58k on August 16 after teasing $56k a day before. The flagship coin has been signaling a potential bullish breakout ahead following last week’s flash out of leveraged traders.
Furthermore, major global stock indexes, led by NIKKEI 225 jumped 3.64 percent on Friday, and have continued with a bullish recovery following last week’s general crash.
Stablecoins Supply on Crypto Exchanges on the Rise
Since the global market crash on August 5, popularly referred to as Black Monday, stablecoins insurers have minted more than $1.5 billion, which has been deposited to different centralized exchanges. From historical data, it is safe to assume that a sharp rise in stablecoins supply on different centralized exchanges often leads to a bullish outlook and vice versa.
According to on-chain data analysis, Cumberland, a top-tier crypto liquidity provider, has received 1.28 billion USDT from stablecoin issuers Tether on the Ethereum (ETH) network and deposited around 1.23 billion to different exchanges. In the past 24 hours, Cumberland has deposited $320 million to different CEXs, which was received from Tether Treasury.
Precisely, $639 million was deposited into Coinbase Global Inc. (NASDAQ: COIN), which was forwarded on behalf of institutional investors. Around $288 million was forwarded by Cumberland to Kraken on behalf of its customers and about $180 million was sent to OKX crypto exchange.
Earlier today, stablecoins issuer Circle Internet Financial minted 250 million USDC on the Solana network. Since April, Circle has minted a total of 4.5 billion USDC on the Solana network, which has dramatically increased its overall liquidity, especially for meme coins.
As a result, the supply of stablecoins on centralized exchanges has reached a new multi-month high, thus reciprocating heightened buying power.
Currently, stablecoins on all exchanges are reaching historically high levels.
IMO, buying power will become stronger than ever in the near future.#BTC #Bitcoin pic.twitter.com/m2TXW8xj7X
— 우민규 (Woominkyu) (@Woo_Minkyu) August 16, 2024
Economic Outlook
Following the recent market crash, fueled by carry trades between the Japanese Yen and other major global currencies, traders have been cautious of possible weakness ahead. Furthermore, August and September have been identified as bearish months for the crypto industry before a generally bullish outlook in the fourth quarter.
Meanwhile, traders are patiently waiting for the speech by Bank of Japan’s Governor Kazuo Ueda before the parliament on August 23. Notably, the BoJ’s report will coincide with the talk by Fed Chair Jerome Powell at Jackson Hole, which offers much-needed insights into the economic outlook.
Moreover, the US Fed is expected to cut its interest rate for the first time since the Covid pandemic in September.
Midterm BTC Price Expectations
While I do expect our green demand zone to hold at this time, I would not be surprised for us to see some more chop here in the coming days.
We front ran local supply above on the last move up. Clear this and we are good to squeeze to 63k but while we are below it have to be a… https://t.co/yHgnUcYjKV pic.twitter.com/HOdOM5nluh
— CrediBULL Crypto (@CredibleCrypto) August 16, 2024
After being trapped in a correction mode for the past five months, Bitcoin price is on the verge of a major bullish breakout before the end of this year. From a technical standpoint, if Bitcoin price loses the support range between $56k and $58k, the instrument will gradually slide towards $48k in the near term before rebounding to a new all-time high.
