Stablecoin Inflows May Not Sufficient to Push Bitcoin to New ATH for Now #CriptoNews

Similarly, this recent ATH of $108,000 for BTC was possibly catalyzed by a $30 billion expansion in the market value of stablecoins as well.

Hence, it is safe to say that there’s a correlation between stablecoin flows and Bitcoin’s price.

Based on this analysis and the relative stalled expansion of this segment of the crypto space in the past 30 days, there does not seem to be enough fuel for Bitcoin to experience a rally of a high magnitude.

That does not necessarily mean that BTC may not be propelled to local highs perhaps 5% to 10% higher than the most recent peak but it would be difficult to see its price moving from $100,000 to $200,000 in the next 30 days if stablecoin flows continue to expand at this slow rate.

BTC Rallies as Inflation Slowed Down in December

The Bureau of Labor Statistics (BLS) in the United States released its inflation data for December just a few minutes ago and the annualized figure came slightly below analysts’ estimate for the period.

Last month, prices rose by 3.2% compared to the same period a year ago or 10 basis points lower than the market’s consensus estimate.

Inflation is a critical variable that central bankers take into account to make monetary policy decisions. If inflation is under control, they will be more inclined to keep lowering interest rates, which benefits high-risk assets like cryptocurrencies.

The market responded positively with Bitcoin is surging nearly 6% thus far in the session as lower-than-expected inflation could prompt the Federal Reserve to reconsider its monetary policy decision and perform additional interest rate cuts in 2025.

Yesterday, the producer price index (PPI), which measures how wholesale prices have evolved in the economy, expanded at a lower rate than expected as well at 0.2%. This helped catalyze the rally that we witnessed in the crypto market yesterday, which saw BTC recover strongly from its recent pullback.