The Worst Bitcoin Liquidation Coming To An End?
According to the co-founders of one of the leading on-chain analytics firms, there are many factors that trigger a significant upside move for Bitcoin sooner than traders think.
In Glassnode’s latest newsletter, Jan Happel and Yann Allemann said that while the current price action looks bleak, the US Federal Reserve’s (Fed) surprise policy change could be the catalyst bullish for BTC.
“In a volatile environment where bad news is perceived as good news, bitcoin has been compressed between $19,000- $21,000 while Swissblock’s Bitcoin Risk Signal reflected an easing risk. Despite a weak price action in June, there is an impending pronounced move.”
Markets are indecisive as investors review upcoming data, eagerly awaiting the US Federal Open Market Committee (FOMC) meeting and Fed policy projections. Will the Fed raise rates aggressively in July and September? Or has the economy shown enough weakness to convince the Fed to change course?
The Glassnode founders also track the stablecoin supply ratio (SSR), which is the total market capitalization of BTC divided by the total market capitalization of all known stablecoins in circulation.
According to Glassnode, a low SSR indicates that stablecoins currently have more purchasing power than BTC.
According to Happel and Alleman, the current state of the SSR indicator is leaning towards Bitcoin being very oversold.
In a new interview on the Hard Money podcast, Alden suggested that leading digital asset Bitcoin could be on the cusp of recovery once mass liquidation stops. However, Alden warned that the leading cryptocurrency by market capitalization could fall another step despite currently being in a “deep value zone.”
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