•Bitcoin has not made new highs for nearly a month, and its price is at its lowest since March 17.
•An increase in stablecoin liquidity is essential for on-ramps of new liquidity from hedge funds, family funds, and high-net-worth individuals.
•The crypto industry is facing numerous setbacks caused by FTX, Celsius exchanges and the loss of institutional backbones like Genesis, Silver Gate, and Signature Bank.
Is The Crypto Market Primed For Bull Run?
The crypto market has been stagnant in terms of price growth over the past month with Bitcoin’s price stuck at its lowest levels since March 17. Popular analyst Nicholas Merten believes that an increase in stablecoin liquidity is essential for a potential bull run as it will attract more hedge funds, family funds and high net worth investors into the space. Furthermore, he pointed out several challenges faced by the crypto industry such as setbacks from FTX and Celsius exchanges as well as the loss of institutional backbones like Genesis, Silver Gate and Signature Bank which are hindering on-ramps and off-ramps for large scale companies.
Short Term Direction
Nicholas Merten highlighted that analyzing momentum indicators can help to understand the market’s short term direction. He noted that despite bearish resurgence in terms of momentum indicators such as Dash Report and Lux Algo; bulls still remain in control since January’s breakout based on weekly timeframes.
Necessary Narratives For New Bull Markets
According to Merten various narratives have been applied to explain a possible new bull market such as central bank balance sheet expansion or bank runs but none of these have held true so far due to the contraction in US Central Bank balance sheet coupled with flat stablecoin liquidity.
Increase In Liquidity Essential
Merten argued that an increase in stablecoin liquidity is key for a potential bull run because it will open up more on ramps for investors who don’t currently hold crypto assets to enter the space. However current conditions indicate there is a contraction both globally as well as in terms of dollar liquidity which casts doubt over whether a new bull run will be seen anytime soon or not.
Overall popular analyst Nicholas Merten believes that while bulls still remain in control currently; an increase in stablecoin liquidity is necessary if we want to see a significant bull run anytime soon due to current challenges faced by the crypto industry including losses from FTX exchanges etc..