Bitcoin’s growth Could Be Supported by Stablecoins

The growth of the leading cryptocurrency might be supported by the increasing issuance of stablecoins, according to Marcus Thielen, the founder and CEO of 10x Research. He believes that the ongoing issuance of major stablecoins like Tether and Circle could signal the influx of fresh capital from institutional investors into the cryptocurrency market. Over the past week, approximately $2.8 billion worth of stablecoins have been issued, which Thielen interprets as a bullish indicator for Bitcoin. However, he emphasizes that for Bitcoin to experience sustained growth, favorable macroeconomic conditions in the U.S. alone won't be sufficient. Real cash inflows through stablecoins will be required.

Currently, Bitcoin is facing a resistance zone around $60,000 to $61,000. According to Thielen, overcoming this barrier will require more than just positive inflation data. He notes that while Bitcoin has shown resilience, further growth is likely to depend on institutional demand, particularly through stablecoin purchases. This factor has played a crucial role in stabilizing Bitcoin's price surges since the beginning of the year, while other influences have had less impact. In the short term, however, Bitcoin may continue to trade sideways unless there is a shift in macroeconomic policy from the Federal Reserve.

Thielen's analysis highlights the importance of stablecoin issuance rather than just minting.

Other Bitcoin price predictions

Meanwhile, analysts at Glassnode have observed a notable return to long-term Bitcoin accumulation following the sharp market correction in early August. This trend is particularly evident among large wallet holders, who are often associated with exchange-traded funds (ETFs). Over the past three months, an additional 374,000 BTC has been moved into the hands of long-term holders. Glassnode analysts note that this accumulation phase has slowed the distribution of coins. Experts see the potential for further buying pressure from hodlers, who are not in a hurry to sell their coins, preferring to wait for higher valuations before resuming trading.

This cautious approach among hodlers is not surprising. Bitcoin has already risen by 109.2% over the past year, but the path to higher prices may take more time. Prominent crypto analyst Jelle has predicted that Bitcoin could reach $140,000 by the end of this year. Achieving this target would require an increase of approximately 128% from current levels. While this may seem ambitious, the past year's performance suggests that such gains are within reach for the leading cryptocurrency. However, if this target is not met by the end of 2024, it could still be achieved at some point in 2025.

Crypto analyst Jamie Coutts from Real Vision shares these optimistic sentiments. He believes that the leading cryptocurrency is in an ideal position. According to Coutts, the current correction is preparing the cryptocurrency for a significant "bullish breakout." He notes that over the past ten years, BTC has typically fallen for several months before reaching a bottom, followed by a sharp recovery. This is often followed by a mid-cycle correction before the final breakout..

Coutts argues that the combination of increasing global liquidity and the launch of BTC ETFs creates a perfect scenario for the cryptocurrency. He expects Bitcoin's volatility to rise in the near future, potentially leading to new highs. This aligns with the broader view among crypto analysts that Bitcoin is gearing up for another bullish phase, driven by favorable macroeconomic conditions and growing institutional interest.

This accumulation phase has led to a noticeable slowdown in coin distribution by hodlers, indicating that long-term investors are not eager to sell at current prices. According to analysts, this could result in additional buying pressure in the event of a price increase. Hodlers are waiting for higher prices before resuming active sales, which could support further growth in Bitcoin's value.

However, the path to new highs may not be straightforward. Crypto analyst Altcoin Sherpa has expressed concerns about the current movement in the cryptocurrency market. In a post on X (formerly Twitter), he stated that if the bulls can hold above the $58,000 level and increase buying pressure, we could see new highs. The opposite situation could trigger a broader market downturn.

In conclusion, the future growth prospects for Bitcoin look promising, although opinions vary. The ongoing issuance of stablecoins, combined with increasing institutional interest and favorable macroeconomic conditions, could pave the way for further price gains. However, the market remains sensitive to various factors, including regulatory changes and macroeconomic shifts. Investors will need to carefully monitor these dynamics as they navigate the uncertain terrain of the cryptocurrency market.