Growing Stablecoin Balance Could Give Bitcoin Bulls a Powerful War Chest

Bitcoin’s bulls and bears have reached an impasse as the cryptocurrency enters a consolidation phase within the upper-$6,000 region. This lackluster bout of sideways trading comes shortly after the crypto faced multiple firm rejections in the lower-$7,000 region.

As the long-term bulls set their stall out ahead of the $9,000 area and the long-term bears establish their position within the $6,000 area, investors should consider conducting a short-biased trade in order to lock in the upside potential before the fundamental weaknesses take hold.

The recent rally has not been backed by an uptrend either. Two weeks ago, analysts struggled to justify the cryptocurrency and noted it had hit a low over $4,000. The price has since recovered to $7,005, but the consensus is the rally will take some time to play out. One bull in particular is refusing to budge.

However, the market saw a few positive stops this week, with most of these coming on Thursday and Friday. With the ending of those two sessions seeing the largest four-day values for the week and the volume hitting a six-month high, the bulls may be on to something. This fight is certainly an intriguing one and will surely continue over the coming weeks.

Stablecoin balances on exchanges are currently seeing unprecedented growth, which has led one researcher to note that these funds could act as a war chest for the crypto’s bulls.

Some crypto’miners/ traders are now eyeing their stash of bitcoins for eventual conversion to stablecoin on exchanges like Bittrex. Earlier this month, various bitcoin, ether, and litecoin wallets were flooded with coins that appeared to have 'stablecoin' in the name like USDT – not at all far from the truth, as the question of what constitutes a stablecoin has been at the heart of one of the biggest controversies over the past six months.

A growing, consistent flow of stablecoins will allow this supply to increase, resulting in higher prices of safe-haven assets in the future. This might be enough to outweigh the spread the market, at least until the volatility forces btc to raise tits price.These would most likely lead to more stability on bitcoin price. This is also an indication that many investors are of the view that bitcoin is doing really well right now and the global economies will be important contributors to this.

Update the USDT + USDC stablecoin balances in exchanges has crossed $1.3B, up by $300M in 2 weeks. It is a measure of how much money is sitting on the sidelines or placed in limit orders at exchanges, waiting for the perfect moment to buy,” he said while pointing to the below graph..

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