The latest outlook in the Bitcoin market indicates that bullish attempts may remain short-term reaction movements rather than a permanent recovery. While the liquidity in the market is weakening, the slowdown in stablecoin flow is particularly noteworthy. This chart shows that new capital entering crypto assets is insufficient to support a long-term rise.
Liquidity weakness comes to the fore
The significant slowdown in the growth of USDT and USDC supply compared to previous periods stands out as one of the main factors limiting the purchasing power in the market. USDT issued by Tether and USDC issued by Circle are among the two most widely used major stablecoins in the crypto market. The increase in the supply of these assets is often considered one of the important indicators of new money entering the market.
Strong rallies seen in Bitcoin in the past were supported by the new purchasing power provided by the increasing supply of stablecoins. In the current table, it is seen that this support has weakened significantly.
Examining past cycles, it appears that sharp slowdowns in stablecoin growth coincided with declines in Bitcoin price. Although there were short-term recoveries, they had difficulty generating permanent momentum and sales pressure subsequently emerged again.
| Indicator | Current view |
|---|---|
| USDT and USDC supply growth | It slowed down compared to previous periods |
| New capital entry into the market | Failed to support long-term rise |
| Short term uptrends | Difficulty producing lasting trends |
Technical outlook remains under pressure
Bitcoin is trading around $59,000 after pulling back sharply from the $80,000 region. The fact that the price remains below the 50-day, 100-day and 200-day moving averages shows that the downward structure is maintained in the technical outlook. In particular, the downward sloping course of these averages indicates that the selling pressure has not completely ended yet.
The recovery attempt seen in May as the 200-day moving average was approached was perceived positively at first. However, this movement was short-lived and then the sellers took control again. Thus, the price retreated again towards regional lows.
Momentum indicators also do not produce clear signals supporting a stronger recovery. The weak RSI indicator reveals that buyers are not able to respond strongly enough to the current downward trend.
Ascension attempts may not be permanent
When new money inflow to the market is limited, upward movements can be shaped mostly by speculative positioning and closing short positions. Although such movements sometimes lead to sharp jumps, it is more difficult to turn into a permanent trend change.
Unless liquidity conditions improve and stablecoin growth accelerates again, the possibility that strong reaction rallies will be followed by new selling waves remains on the table.
For this reason, possible reaction increases that may be seen in the current environment may be temporary technical responses rather than a permanent change in direction. Unless new capital flows occur on a scale that will support a long-term recovery, a similar volatile course can be expected to continue in the Bitcoin market.
