This week started off brightly for investors and holders of Bitcoin (BTC) alike as they looked to put the woes of last week behind them.
This week started off brightly for investors and holders of Bitcoin BTC $99 114 24h volatility: 2.4% Market cap: $1.96 T Vol. 24h: $53.52 B alike as they looked to put the woes of last week behind them. The asset began showing positive signs from Monday and has since added gains significant enough to help it climb out from below $90,000, where it was struggling.
Despite the signs, however, some doubts remain in the market. Particularly, in terms of whether or not BTC can really sustain the gains it has been amassing recently or, better still, do more gains.
These fears become even more glaring as the market awaits the US inflation data that is due for release later today.
As would be expected, anything short of an improved inflation data report would mean problems for Bitcoin and many other cryptocurrencies.
The inflation report is expected at 13:30 UTC and will show changes in the cost of living for December. Analysts predict a month-on-month increase of 0.3%, similar to November’s figures, and a year-on-year rise to 2.9%, slightly higher than November’s 2.75%. Core inflation, excluding food and energy costs, is also projected to rise 0.2% month-on-month and 3.3% year-on-year.
Other than the US inflation data, another factor that appears to have cast a shadow of doubt over sustained gains for BTC, is the supply of major stablecoins. According to Glassnode data, stablecoin supply may have stalled, meaning that not much is happening to the market in terms of fresh capital inflows.
For context, the supply of the top four stablecoins by market value has yet to change significantly in over a month. As of today, their cumulative supply stands at around $189 billion. This means that there has only been a 0.37% increase that took place in the past month.
Meanwhile, it might be worth noting that this near-zero change in stablecoin liquidity is the stark opposite of what was observed in the stablecoin market in late 2024. Glassnode shared this analysis in a Telegram note.
Between November and December last year, over $27.3 billion was thrown into the market as fresh capital. However, the capital was more than enough to support Bitcoin’s climb from $70,000 to over $108,000.
For the sake of comparison, earlier 2024 also comes to mind. In the first quarter of the year, inflows of about $14.68 billion were what helped Bitcoin to gain 70% to eventually hit the $70,000 mark.
For now, the way forward for Bitcoin and the general crypto market remains uncertain. However, a favorable inflation report and fresh capital injection into the stablecoin market may just better its chances, setting it up for further gains.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.
