Currently, moves are being set up that could push the price of bitcoin (BTC) to higher levels. Two key factors are converging and They project a possible increase in the price of bitcoinwhich could also drag the entire cryptocurrency market into an upward trend. The first factor is related to BTC reserves on exchanges. These reserves have been noticeably decreasing, a trend that has historically preceded price rallies. The following graph shows the decrease in reserves of the first digital currency in exchanges.
BTC reserves on exchanges. Source: CryptoQuant. The reason is that a lower amount of BTC available on exchanges reflects reduced selling pressure, as Investors transfer their funds to wallets, decreasing the circulating supplyAccording to an analysis by trader Tarekonchain, shared by on-chain data provider CryptoQuant, this phenomenon is an indicator that could signal an upcoming surge in the price of bitcoin.
Stablecoins show a bullish path for bitcoin
The second factor that is playing a crucial role is the increase in stablecoin reserves, mainly USDT, on exchangesThis increase suggests that investors are preparing to buy assets like bitcoin, as stablecoins represent capital ready to be deployed. The following graph shows the increase in this type of cryptoassets on exchanges.
Stablecoin reserves on exchanges. Source: CryptoQuant. When their presence on exchanges grows, it indicates a latent buying interest, which usually translates into a possible increase in demand for bitcoin. In addition, stablecoins, being linked to a fiat currency such as the US dollar, function as a tool to manage market volatility, allowing investors to protect their capital during periods of uncertainty and buy back cryptocurrencies when conditions improve. The trader argues that, taken together, the decline in BTC reserves and the rise of stablecoins set a stage for a possible “bullish breakout in prices”With BTC supply becoming increasingly limited and buying power growing, the market looks set for a significant upward move. Throughout Bitcoin’s history, this imbalance between supply and demand has been a key driver of price increases.
There are factors that can slow down the rise of bitcoin
However, it is important to note that, as BitcoinDynamic reported, an increase in exchanges' stablecoin reserves, especially USDT, does not guarantee that bitcoin will go up immediately. “If the global market remains uncertain or the world economy is going through a period of high risk, investors may be reluctant to make large purchases, which would delay the upward movement,” says Tarekonchain. In this regard, The macroeconomic data of a power like the United States play a fundamental role in volatility of the market. For example, the US consumer price index (CPI) stood at 2.5% year-on-year in August, which implies a slowdown of four-tenths compared to the previous figure and its lowest figure since February 2021. This supports the expectation of interest rate cuts. Colombian analyst Juan Rodríguez pointed out that this situation could lead to a cut of 0.25 basis points instead of the 0.50 points that were being anticipated, which would be a positive factor for the market. However, unemployment remains a weak point in this economic equation.he points out. In line with Rodríguez, analyst Daniel Mudvi also highlights that The fall in inflation is an encouraging signas it shows that the United States is moving towards the Federal Reserve's objectives. However, it is worrying that some sectors, like housing, are showing signs of fragility. House prices and rents could put pressure on the broader economy, which could complicate the near-term outlook.