Bitcoin (BTC) Rally Stalls Near $66K as Key Indicators Suggest the Market Is Not Ready for a New All-Time High

China-focused stablecoin data and low retail participation point to a slowdown, while broader global interest remains muted.

Key Takeaways

Bitcoin’s recent rally, fueled by institutional investors, has brought the cryptocurrency close to a new all-time high. However, key indicators suggest that BTC may not be ready for this milestone yet.

China-focused stablecoin data and low retail participation could signal a slowdown in Bitcoin’s price surge, while broader global interest remains muted.

Bitcoin’s price hit a seven-month high on Monday, rallying to levels not seen since the cryptocurrency’s record run in April. Surging past the psychological resistance at $60,000, BTC reached a high of $65,888 on the Bitstamp exchange.

This rally follows a period of consolidation for Bitcoin, which began after the cryptocurrency crashed from an all-time high of nearly $69,000 in November. Since then, institutional investors have played a major role in driving up Bitcoin’s price, with instruments like the ProShares Bitcoin Strategy ETF (NYSE: BITO) seeing record inflows.

But as Bitcoin’s price approaches a new peak, several indicators point to a potential slowdown in its rally. One key factor is the premium at which the China-focused stablecoin market has been trading.

Typically, a discount in this market signals bearish sentiment among over-the-counter (OTC) traders, while a premium indicates optimism. Stablecoins have been trading at a discount in China since March 2022, suggesting that OTC traders may be largely bearish.

Another factor is the lack of retail participation in the current Bitcoin rally. A key indicator of market euphoria, retail participation surged during past bull markets, with the Coinbase app ranking as the number one downloaded app in the U.S.

However, during the recent rally, retail interest has been low. According to data from Apptopia, the Coinbase app currently ranks 417th in terms of downloads on the iOS App Store, far below its peak positions during previous rallies.

Moreover, on-chain data shows that short-term holder supply has been declining, indicating that retail investors are not piling into BTC yet. This lower retail activity could suggest that Bitcoin’s rally may still have room to grow before reaching its peak.

Broader global interest in crypto also remains muted, with Google Trends showing that worldwide searches for the term “Bitcoin” are still significantly lower than during the cryptocurrency’s past bull markets.

This lack of mainstream attention could indicate that more participation is yet to come, potentially driving up Bitcoin’s price further. However, the absence of broader interest also makes the sustainability of Bitcoin’s rally more uncertain.

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