3 reasons why analysts expect the Crypto Bull market to resume

In the past weeks, the crypto market has been relatively quiet. This has fueled fears that Bitcoin and altcoins will crash.

However, market observers, citing stablecoin inflows and other factors, have maintained that the possibility of a bull cycle will remain high.

The stablecoin market will expand.

Blockchain analytics firm IntoTheBlock has revealed that the stablecoin's market capitalization is recovering strongly. As of October 2023, various assets in the industry, including USDT and USDC, have increased by more than $9 billion. Now the stable coin market capitalization has reached 133 billion dollars.

This increase reflects renewed strength in the stablecoin sector and the introduction of a significant amount of liquidity into the cryptocurrency industry. It is also a good indicator of growing investor confidence that a bullish market trend is about to begin.

As of October 2023, the stable market value is recovering strongly, adding more than $9 billion. A continued uptrend will further strengthen the upcoming bull market cycle.

Crypto analyst Zaire provided a clearer explanation. According to the analyst, stablecoins are a “bridge” between conventional finance and the crypto industry. Therefore, the increase in market capitalization shows that “the bridge is widening to accommodate more crypto enthusiasts.

Interestingly, Tether USDT leads the stablecoin sector with a market capitalization of $96 billion. However, analysts at JP Morgan expressed concern about USDT's dominance, indicating significant exposure to the industry. Instead, they argue for USDC due to Circle's regulatory compliance.

Incentives for further development

In addition to the ever-increasing market capitalization of stablecoins, industry experts believe that cryptocurrencies will rally because of the upcoming Bitcoin halving and the recent approval of Bitcoin ETFs.

A recent study shows that optimism about the halving effect on Bitcoin's price is on the rise. About 84% of investors believe that it will help push Bitcoin to greater heights.

“More than half of the respondents predict that Bitcoin's price will reach $30,000 to $60,000 by the halving (around April 2024), while 30% believe that the price will break $60,000,” Bitget explained.

Similarly, the newly launched Bitcoin ETFs have further set the stage for a possible upside in the crypto market. Observers point to the early success of these ETFs as an indication of their potential impact on the overall market.

“Spot Bitcoin ETFs took ~$700 million in net inflows this week alone. Very impressive. People continue to overestimate the short-term impact of ETFs and dramatically underestimate the long-term impact,” said Bitwise CIO Matt Hougan.