Macroeconomic Factors Pose a Threat to Bitcoin Price Growth: Report from CoinEdition


© Reuters. Macroeconomic Factors Posing Threat to Bitcoin Price Growth: Report
  • A report from CryptoQuant this morning revealed that while BTC has the potential to rise, there are three factors that could prevent it.
  • A decline in the holdings of US institutional investors and a decrease in the total supply of stablecoins are just two of the issues highlighted in the report.
  • The report also noted that there are no new players in the BTC smart money space.

On-chain analytics platform, CryptoQuant, published a post on Twitter earlier today regarding (BTC) and what could be in store for the market leader for the rest of the year. The post mentioned that BTC still has more potential to go higher, but there are many factors that could hinder any bullish moves for BTC.

One of the important factors affecting the growth of BTC is the decline in the holdings of US institutional investors. Historically, during major bull markets, an increase in bitcoin holdings by US institutional investors has been associated with large price hikes.

BTC US to Remaining Reserve Ratio (Source: CryptoQuant)

However, in recent months, these holdings have been steadily declining. According to CryptoQuant, this is likely attributed to institutional investors turning to global exchanges and decentralized exchanges (DEXs) in response to the ongoing crypto market regulations imposed by the Securities and Exchange Commission (SEC).

Total stablecoin supply (Source: CryptoQuant)

Another factor limiting BTC’s bullish momentum is the decline in the total supply of stablecoins. The total supply of stablecoins can serve as an indicator of the purchasing power in the cryptocurrency market. After reaching a peak of $99 billion in February 2022, aggregate supply has shrunk to $71.1 billion, indicating a decline in aggregate purchasing power.

Finally, CryptoQuant notes that the lack of new savvy players also poses a limitation for BTC’s rally potential. The BTC Token Transfer Index revealed no major changes, which may indicate that the recent price movement is mostly driven by supply and demand dynamics rather than the entry of new smart money.

Although BTC shows the possibility of further price hikes, CryptoQuant predicted that macroeconomic factors such as the expected recession in the latter half of this year could incite a collapse in asset prices. As a result, BTC is not likely to see a sustained rally like it did in 2015.

Disclaimer: Opinions and opinions, as well as all information shared in this price analysis, are published in good faith. Readers should do their research and due diligence. Any action taken by the reader is at their own risk. Coin Edition and its affiliates will not be liable for any direct or indirect damage or loss.

Macroeconomic Factors Then Pose Threat to BTC Price Growth: The report appeared first in Coin.

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