MAC_D
3 Reasons Why BTC Rise Is Limited
BTC began to rise early this year, rising from its lowest price by up to 100%. Looking at various on-chain cycle indicators, Bitcoin appears to have entered a recovery period from a downturn, showing further upside potential after the adjustment. Nevertheless, there are several reasons why the rise will be limited. First, the decline in US BTC holdings. In the past, when US institutional investors' BTC holdings increased during major bull markets, the price rose significantly. However, US institutional investors' BTC holdings have been declining continuously in recent months. This is likely due to the fact that they have switched to global exchanges and DEXs rather than US exchanges due to the ongoing regulation of the crypto market by the SEC. Second, the total supply of stablecoins has decreased. The total supply of stablecoins shows how much buying capacity is in the crypto market. In February 2022, it peaked at $99 billion and is now at $71.1 billion, indicating that buying power in the crypto market has fallen. Third, the absence of new smart money players. If you look at the BTC Token Transfer indicator, there is no change. This seems to have been largely caused by supply and demand factors, not by the rise of smart money. When Bitcoin fell to 15.8K due to the FTX crisis, the proportion of long-term holders was already close to 80%. Also, liquidity expansion caused by the Fed's expansion of its balance sheet in March created an explosive price increase. In conclusion, it is true that the price of BTC has the potential to rise further, but macro issues such as the recession in the second half of this year could cause asset price crashes. Therefore, it will take a little longer before the movement and the general upward trend, which are repeatedly rising and falling like in 2019, rather than continuous rising like in 2015.