Key Points:
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Bitcoin and altcoin are slowing down gold and stock in regards to new all-time highs.
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Research suggests that liquidity patterns are partially condemned as traders withdraw stubcoins.
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History shows that traditional risk assets need to be “cooled” before cryptography surges.
Bitcoin (BTC) is falling because Crypto Markets cannot copy gold or stocks.
A new research from Onchain Analytics Platform, Cryptoquant shares four important reasons why Bitcoin and Altcoins are “red.”
Crypto is still at the end of the liquidity pipeline
Bitcoin has recently been “stuck” as liquidity games have been keeping them away from taking away their all-time highs.
At the same time, both gold and US stock markets continued to keep repeating the highest ever highs, raising concerns that Crypto hasn’t become the mainstream asset class.
Encrypted Contributor Xwin Research Japan has other ideas. The code claims to simply repeat historical patterns.
“In the early stages of interest rate reductions, institutional capital tends to move first to non-combust assets such as stocks and gold,” he wrote in one of its “quicktake” blog posts, referring to interest rate reductions from the US Federal Reserve.
“Cryptocurrencies, especially altcoins – they only benefit if they arrive at the end of the liquidity pipeline and the risk appeal grows.”
Xwin compared the current market setup for Bitcoin and the largest Altcoin Ether (ETH) to that from a year ago and found important similarities.
“This pattern reflects 2024: frontrunning rally after the Fed rate reduction, then a fix was made as liquidity failed to fully rotate into the crypto.
As reported by Cointelegraph, Bitcoin in particular has long been known to pursue gold higher after months of delay.
Bitcoin vs. stock “lag and jump”?
Xwin was continually reserved as another factor in which Stablecoin produced a delayed response to risky moonshots.
Related: Bitcoin Bollinger Band Tighter than ever as a Trader’s Eye $107k ‘Max Pain’
Overall, Stablecoin Supply hit a record $300 billion this month. Still, at the same time, more stubcoins are leaving more exchanges than they enter than they show a risk-off or profit-making mentality among traders.
“Level is used outside exsage, bridging, bystanding, or private markets, rather than actively deploying to buy BTC or ETH,” he summed.
Similar issues affect accumulation, as data from derivative platforms demonstrates traders’ preferences for “hedging and leverage strategies.”
“History suggests that Bitcoin has a tendency to “lag and jump.” Xwin concluded.
“Following the equity ATHS, BTC has historically won +12% in 30 days and +35% in 90 days. Short-term headwinds remain, with QT, financial liquidity absorption and the expiration dates for looming options, but structural setups support crypto as the liquidity cycle catches up.”
As reported by Cointelegraph, the expiration date of the $22.6 billion option this Friday is significant and could affect future prices.
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.