The stablecoin market continues to evolve with significant inflows recorded over the past days. Recent data suggests a gradual increase in these cryptocurrencies’ influx, signaling ongoing growth in the crypto ecosystem. This development underscores cryptocurrencies’ potential to become a more uncorrelated asset class, particularly as global economic debates around tariffs and trade wars persist.
In a surprising turnaround, the stablecoin market has seen a significant inflow despite a slowdown in growth. According to a recent report by Matrixport, this growing positive sentiment indicates market growth.
However, Matrixport asserted that the trend is not sufficient to trigger a significant altcoin rally. Instead, massive inflows are illuminating the crypto industry’s steady growth, making it clear that the sector is far from stagnant. Matrixport cited, “While this may not be enough to trigger a parabolic altcoin rally, it clearly shows the industry is far from stagnant.”
Crypto vs Traditional Markets
According to Matrixport, these stablecoins defy the uncertainty surrounding the broader financial sector. Recently, the traditional market, including stocks and bonds, saw its largest fall since 2020. This debacle, which followed US President Donald Trump’s tariff announcement, largely left cryptocurrencies unaffected.
Notably, Bitcoin remained resilient to the stock market collapse despite BTC’s strong correlation with the latter. And now, these crypto buck the negative trend, securing significant inflows. This trend suggests that crypto is potentially becoming a more uncorrelated asset class; cryptocurrencies are becoming less influenced by traditional markets. Matrixport’s statement read:
“Notably, stablecoin inflows are increasing despite uncertainty in equity and bond markets, suggesting crypto could be evolving into a more uncorrelated asset class.”
US Stablecoin Regulation: A Closer Look
The significant inflow coincides with the favorable regulatory environment in the United States. Recently, the Trump government passed the STABLE Act to establish regulatory guidelines for all USD-pegged coins, including Tether (USDT) and Circle (USDC).
Bitcoin (BTC) price is trading with a bullish bias, confronting the resistance at $94,000 with prospects for more gains. However, a renowned analyst says to temper Bitcoin rally hopes, citing a crucial indicator.
For a sustained rally, capital needs to enter the market consistently, as this provides the liquidity needed for further upside.
The Bitcoin price outlook was bullish on Wednesday during the early hours of the Asian session. Bullish technical formations, including the falling wedge pattern, hinted at further upside for the pioneer crypto.
As of this writing, Bitcoin was trading for $93,714, with up to 9% of a 20% potential rally still in the cards. The falling wedge pattern’s target objective is the 20% climb, determined by measuring the longest height of the wedge and superimposing it at the breakout point.
This bullish reversal is already in action after Bitcoin price flipped the critical resistance at $85,000 into support and converted the support zone into a bullish breaker.
Based on the daily chart above for the BTC/USDT trading pair, a daily candlestick close above $91,575 could set the tone for Bitcoin’s price to move further upside.
Increased buying pressure beyond the immediate resistance at $94,000 could see Bitcoin price eye $100,000 next. BTC could extend to the $102,239 target objective in a highly bullish case.
Technical indicators align with this outlook. The Relative Strength Index (RSI) is rising, recording higher highs, suggesting growing momentum. Its position below 70 indicates there was still more room upward before BTC was overbought and at risk of correction.
Similarly, the Awesome Oscillator (AO) histograms flashed green, indicating bullish control. Their position above the midline (in positive territory) adds credence to the bullish thesis.
However, 10x Research’s head of research, Markus Thielen, urges caution, citing the lagging stablecoin minting indicator.
“Given that our stablecoin minting indicator has yet to return to high-activity levels, we remain cautious about the sustainability of the current Bitcoin rally,” Thielen wrote in the latest 10X research.
The stablecoin minting indicator refers to the issuance or creation of new stablecoins, such as Tether (USDT) or USD Coin (USDC). Stablecoin minting often signals capital entering the crypto market, and it can have several implications for Bitcoin’s price.
Among them are increased liquidity and confidence in the market as investors anticipate profitable opportunities. Both of these are signs of potential bullish pressure.
According to the analyst, the absence of strong stablecoin inflows “raises questions about follow-through.” Bitcoin’s rally to the $100,000 psychological level remains under threat.
Bitcoin vs Stablecoin Minting Indicator. Source: 10X research
Nevertheless, if profit-taking commences, a candlestick close below the midline of the bullish breaker at $86,562 could reverse the trend. This could plunge Bitcoin back into consolidation below the crucial level of $85,000.
Welcome to the US Morning Crypto News Briefing—your essential rundown of the most important developments in crypto for the day ahead.
Grab a coffee to see what analysts say about Bitcoin amid the showdown between BTC behemoth Strategy (formerly MicroStrategy) and Jack Mallers’ investment firm, 21 Capital. With their Bitcoin models coming into question, is there a specific definition of what winning means in Bitcoin?
Strategy Grows Bitcoin Stockpile, Buys $1.42 Billion in BTC
Strategy announced that it recently purchased another 15,355 BTC worth approximately $1.42 billion at an average price of $92,737 last week.
The firm currently holds 553,555 BTC, valued at approximately $52.7 billion. The average buying price is $68,459, and the unrealized profit is $14.8 billion.
“By continuing to grow its Bitcoin holdings, the company maintains its status as a major force in the cryptocurrency market, drawing interest from investors and industry analysts. Strategy is the largest Bitcoin Treasury Company, an independent, publicly traded business intelligence company, and a Nasdaq 100 stock,” Phoenix reported.
A recent US Crypto News publication highlighted the advent of 21 Capital. The Bitcoin investment firm sprouted after Cantor Fitzgerald, SoftBank, Tether, and Bitfinex pooled $3 billion in capital.
Based on sentiment, this new venture could inadvertently challenge Strategy’s position at the helm of corporate Bitcoin ownership in a model sense. According to 21 Capital, Strategy size could make increasing its Bitcoin per share difficult, a metric investors tend to consider.
Amid chatter that 21 Capital could threaten the Michael Saylor-led firm, BitStrategy, a shareholder at Strategy, challenged the prospective market rival’s business model.
Tension Grows in Bitcoin Treasury Space
In a detailed post on X (Twitter), BitStrategy acknowledged the brewing tension in the Bitcoin treasury arena. However, it holds that Strategy is way ahead of the competition.
“Their company is in direct competition with ours, and they seek to exploit a perceived vulnerability in our structure, openly highlighting their strengths relative to ours to win investment,” BitStrategy challenged in a recent post.
Beyond BTC Yield, also reported in a recent US Crypto News publication, the firm initiated key performance indicators months ago- BTC Gain and BTC $ Gain.
Bitcoin Gain multiplies the BTC Yield by Strategy’s aggregate balance, reflecting the scale of the firm’s operations.
Bitcoin $ Gain takes this further, converting the BTC Gain into dollar terms, for added transparency.
This proactivity by Strategy suggests a commitment to defend its position as a leading Bitcoin-holding corporation amidst rising rivals.
“You can fake an impressive BTC Yield. You cannot fake an impressive BTC Gain,” BitStrategy chimed.
However, analyst KenjiKoshu argues that while Strategy may show substantial Bitcoin gains, smaller companies like 21 Capital could achieve higher Bitcoin per share.
“As someone who has done deep thinking about why MSTR is undervalued, it might be true BTC gain can still be substantial if not higher for MSTR. On a per-share basis, however, which would be what supports the stock; it will be hard to deny a smaller, similarly reputable company is going to make more Bitcoin per share when on the same strategy,” the analyst wrote.
This outlook aligns with sentiment from 21 Capital that Strategy’s large size impedes increasing its Bitcoin per share.
However, BitStrategy articulated that the point of BTC Gain and BTC $ Gain signals the importance of a whole-of-company view of performance relative to a per-share view.
Per the shareholder, there is no agreed-upon conventional valuation methodology for Bitcoin companies. This means any metric is somewhat arbitrary.
Investors increasingly turn to digital assets as a safe haven, with Bitcoin becoming a hedge against the US dollar’s volatility as crypto inflows surge to $3.4 billion.
