Despite Bitcoin’s (BTC) achievement of breaking the $100,000 critical milestone, the cryptocurrency market has been experiencing dominant declines in the past several days. Despite this, the seasoned analyst has explained why Bitcoin’s price has failed to rise.
Over the last many weeks, it has ranged from $90,000 to $100,000. Markus Thielen, founder of 10X Research, cautioned clients in a note that the sluggish liquidity inflows and halting rally from Nvidia could slow down Bitcoin’s gain.
Bitcoin’s Rise Stalls Liquidity
First, according to Thileen, the market’s increasing pace has been hindered by the significant drop in the inflow of liquidity into the cryptocurrency market through channels such as spot Bitcoin ETFs. According to the expert, Nvidia is just one more thing standing in the way of cryptocurrency’s rise. Other technical indicators, not including ETFs, also point to a slowdown in the market’s net liquidity influx.
The expert continued by claiming that Nvidia’s (NVDA) (a pioneer in artificial intelligence and risk assets) halt in advancement halted the rise of Bitcoin and other cryptocurrencies. This slowdown in liquidity expansion might explain why Bitcoin has struggled to maintain a price above $100,000.
As for another factor that has gone unmentioned, the stock price of Nvidia, the largest chipmaker in the world, has decelerated. Except for the summer of 2022, the connection between BTC and NVDA has been quite advantageous since hitting rock bottom in late 2022. However, NVDA’s ascent has slowed since mid-November. The second reason Bitcoin hasn’t been able to realize its full potential is this. One bitcoin is currently worth $97,780.
Effect on Bitcoin’s Value
The price of Bitcoin is highly sensitive to the overall sentiment of the cryptocurrency market, despite the fact that Bitcoin was previously without a peer. At the moment, both consumers and capital are flocking to altcoins like Ethereum and Solana. Along with the launch of Ethereum 2.0 and the astronomical growth of DeFi platforms, Ethereum has been attracting large investments from financial institutions.
The emergence of numerous exchange-traded funds (ETFs) has increased competition. The mainstream banking sector is growing interested in the bitcoin market, despite the fact that Bitcoin ETFs have garnered more than $34 billion during the previous several months. The non-fungible token and decentralized finance sectors are seeing increased interest from investors in alternative cryptocurrencies.
New developments have also affected Bitcoin’s market dominance as investors diversify their digital asset portfolios. Because of this, Bitcoin is no longer the dominant cryptocurrency, and it is harder for it to drive higher market prices.
In Summary
The price surge of Bitcoin’s Rise has encountered several obstacles, such as rivalry from other cryptocurrencies, rising mining difficulty, and resistance at important price levels. Institutional prudence, regulatory uncertainty, and general market mood have further slowed its price growth.
However, after the present challenges are resolved, the long-term picture for Bitcoin is still bright. The price may continue to climb due to falling supply and increasing demand. The market is taking things slow for the time being. But Bitcoin has proven time and time again that it can weather storms and even shock its rivals.
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