As a professional translator, I will provide a descriptive translation of the news article into English, ensuring accuracy and fluency while retaining proper nouns and all images:
Coin World reports:
With Bitcoin’s sideways trading over the past few months, traders are waiting for their signals to re-enter the market before the cryptocurrency resumes its bullish momentum from earlier this year.
In a memo on Wednesday, an analyst at CryptoQuant highlighted a signal worth noting: the liquidity of stablecoins.
Stablecoins: The Key to Driving Bitcoin Higher
Analyst Mac wrote, “The bottom line is, for Bitcoin to truly rebound, we need to see an increase in stablecoin liquidity and circulating supply,” according to CryptoQuant.
The author states that due to the US tightening monetary policy in the previous two years, Bitcoin has been unable to break new highs above $73,700 since mid-March 2024.
Higher global interest rates have damaged the liquidity of the entire economy, including stablecoin liquidity and the total circulating stablecoin supply.
Stablecoins are crypto tokens pegged to fiat currencies, used as equivalents to dollars in the crypto trading economy by exchanges, with traders typically holding the token in preparation for future BTC purchases.
Tether (USDT), the world’s most popular dollar-pegged stablecoin, saw its market value drop from $83 billion in April 2022 to $65 billion in November 2022.
Its total value quickly recovered to over $82 billion in the second quarter of 2023 and has steadily climbed to over $112 billion in the past three quarters, rising alongside Bitcoin prices. That is to say, in the second quarter of 2024, the total liquidity of stablecoins remained essentially flat, as did the price of Bitcoin.
Liquidity Conditions and Bitcoin Price
The analyst wrote, “The reason for Bitcoin’s price rise over the past year is primarily due to expectations of a decrease in interest rates, followed by fiscal policy diverging from monetary policy, continuing to bring liquidity to the market.”
In a recent article, BitMEX co-founder Arthur Hayes believes that the US government’s continued fiscal spending will persist, which will continue to drive up the prices of assets like Bitcoin.
However, analyst Mac says, D believes that the market’s next round of increases also requires the US to adopt a more “loose monetary policy.” Currently, the market predicts that the Federal Reserve may not start cutting interest rates until September.
Mac states, “Before we see these signals, Bitcoin may trade sideways or further correct, and the wise move for investors is to take a long-term view of the market,” D concludes.