Is Bitcoin Trapped in a Lateral Trading Pattern Essential Factors for a Significant Price Increase

Currently, Bitcoin is experiencing a period of lateral trading. A detailed examination of the Bitcoin/USD daily chart reveals that Bitcoin’s value is fluctuating between **$71,700** and **$58,000**. This sideways trend commenced shortly after Bitcoin reached its mid-March peak. The question arises: what’s causing this market stagnation? A key factor is undoubtedly the United States’ stringent monetary policy.

For cryptocurrency traders, grasping this scenario is crucial for accurately predicting Bitcoin’s future price trajectory.

**The Influence of U.S. Monetary Policy on Bitcoin**

To comprehend Bitcoin’s current state, one must first understand the repercussions of the U.S. Monetary Policy on its value. Since March 2022, the U.S. has been progressively tightening its monetary policy, leading to a steady rise in interest rates.

“**Conditions for BTC’s Rise: Stablecoin Liquidity**”
Following its peak in March this year, Bitcoin has shown a horizontal movement pattern. The fundamental reason behind Bitcoin’s inability to initiate another upward rally is the U.S.’s contractionary monetary policy initiated in March 2022.

The effects are evident when examining the total circulation of stablecoins…

— MAC.D (@MAC_D46035)
July 3, 2024

A social media commentator, known as MAC.D, remarked in a post that the upsurge in U.S. interest rates has led to a reduction in stablecoin circulation. It’s widely acknowledged that a liquidity crunch is the direct result of a shortage in stablecoins. Last year, it was the liquidity of stablecoins that contributed to Bitcoin’s robust pricing.

**Bitcoin’s Future Outlook**
At this juncture, it’s essential to acknowledge the challenges in anticipating a significant Bitcoin rally without witnessing positive shifts in the liquidity and circulation metrics of the stablecoin sector. An immediate need for this change is a more accommodating U.S. monetary policy.

Experts suggest that investors adopt a long-term perspective regarding the Bitcoin market.

In essence, to forecast the timing of Bitcoin’s next substantial movement, one should meticulously monitor the developments in U.S. monetary policy and stablecoin circulation.

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**Tags**
Bitcoin
Price Analysis