Bitcoin BTC price regains $27,000 amid encouraging macro and technical signs

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Good morning. Here is what happens:

Price: Bitcoin was trading above $27,000 to recover some lost ground after its plunge last week.

Insights: The decline in the supply ratio of stablecoins over the past 11 days suggests a potential increase in the purchasing power of stablecoins.

Hopeful signs for BTC at $27,000

After seven days of falling prices, bitcoin stabilized.

The largest cryptocurrency by market capitalization was recently trading at around $27,165, up 1.1% in the past 24 hours and slightly above its level at the start of the weekend. BTC remains down more than 10% since May 5, when it began its latest slump, the result of profit-taking and low liquidity amid industry and macro uncertainties.

“Financial markets in general (are) driven by risk, by liquidity, and so, it’s no surprise right now, as people fear risky assets as a whole, we’re seeing large swathes of selling,” Ryan Rasmussen, an analyst for crypto fund manager Bitwise, told CoinDesk TV’s “First Mover” show on Friday.

“When there’s less liquidity, you’re going to have bigger price swings every time an asset (is) sold.” But he added, “There will be more liquidity in crypto.”

Ether, the second-largest crypto by market value, was changing hands near $1,800, down a few fractions of a percentage point and about the same level as early Saturday. Other major cryptos moved into green territory as the Asian trading week began with Litecoin recently up over 5.7%. The CoinDesk Market Index, a measure of crypto market performance, rose 0.8%.

Major Asian indices were mixed with the Nikkei up around 0.5% but the Hang Seng down 0.2%. Rasmussen noted the declining correlation between the crypto and traditional asset markets, which were mixed last week with the tech-heavy Nasdaq Composite rising slightly over the past five days, but the S&P 500 and Dow Jones Industrial Average (DJIA) down 0.2% and 1.1%, respectively.

“Any form of mistrust in traditional financial systems plays into crypto’s game,” Rasmussen said, adding, “I’m happy to see the correlation drop between traditional risk assets, traditional stocks and crypto. “

In an email to CoinDesk, Joe DiPasquale, CEO of crypto fund manager BitBull Capital, noted that “the current macroeconomic situation around the world is creating an environment for crypto assets to thrive.”

This week, DiPasquale is looking for bitcoin’s price to hold within a range between $25,000 and $27,000 “before bouncing back towards $30,000.”

“We don’t think the market needs a catalyst right now,” he wrote. “It’s only a matter of time before we see another major rally.”

What Does the Recent Stablecoin Supply Ratio for Bitcoin Mean?

The Stablecoin Supply Ratio (SSR) has declined by around 11% over the past 11 days, indicating a potential increase in buying pressure for bitcoin.

The metric, which measures the ratio of bitcoin market cap to stablecoin market cap, provides insight into the supply and demand dynamics between stablecoins (used as a vehicle to purchase cryptocurrencies) and the BTC itself.

A higher SSR indicates that purchasing power is weakening, while lower values ​​indicate that purchasing power is increasing.

The recent drop in SSR follows a 52% increase between March and May 5. The pivot indicates that additional liquidity or liquidity reserves have entered the market and could drive BTC prices higher.

Bitcoin (BTC) continued to lose ground in the wake of CoinDesk’s Bitcoin trend indicator, removing the bullish bias for the first time in three weeks. Bitwise crypto analyst Ryan Rasmussen has shared his analysis of the markets. Separately, Terraform Labs founder Do Kwon was set to be released from Montenegro prison on supervised bail as his trial for document falsification continues. Additionally, Chia Network CEO and President Gene Hoffman discussed plans for the blockchain and smart contract platform to go public. Wormhole Foundation COO Dan Reecer also joined in the conversation.

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