The Crypto Market Correction: Not the Top, but the Middle of the Bull Cycle

The current crypto market correction is merely the middle of the bull cycle, not the top, based on the steadily growing stablecoin supply, which may signal more incoming investment according to analysts.

The cumulative stablecoin supply has surpassed $219 billion, suggesting that the current cycle is still far from its top.

Stablecoin Supply Peaks Align with Crypto Cycle Tops

Historically, stablecoin supply peaks have aligned with crypto cycle tops, according to a March 14 post by crypto intelligence platform IntoTheBlock, which wrote:

“In April 2022, supply hit $187B—just as the bear market started. Now it’s at $219B and still rising, suggesting we’re likely still mid-cycle.”

Increasing stablecoin inflows to crypto exchanges can signal incoming buying pressure and growing investor appetite, as stablecoins are the main investor on-ramp from fiat to the crypto world.

ETH Price and the Potential for Another Decline

Still, Ether (ETH) price is down over 52% over the past three months, after it peaked above $4,100 on Dec. 16, 2024, and analysts are eying another decline below $1,900, a “robust” demand zone that may bring more investment into the world’s largest cryptocurrency.

Crypto Market Lacking Direction Ahead of FOMC Meeting

Despite the rising stablecoin supply, the crypto market may continue to lack direction ahead of next week’s Federal Open Market Committee (FOMC) meeting.

Next week’s FOMC meeting may be decisive for crypto markets, which remain influenced by macroeconomic developments, according to Stella Zlatareva, dispatch editor at Nexo digital asset investment platform.

“Bitcoin’s movement below key technical levels, mirroring the S&P 500’s trajectory, highlights the market’s cautious tone as traders await key economic data for direction, including U.S. retail sales and the FOMC meeting.”

“All eyes are set on next Wednesday’s FOMC meeting, anticipating insights into U.S. monetary policy and potential interest rate adjustments, especially given the recent declines in U.S. PPI and initial jobless claims figures, which point towards a slowing economy,” she added.

Conclusion

The crypto market is expected to continue its correction, with some analysts predicting a potential decline below $1,900 for ETH. However, the rising stablecoin supply may indicate more incoming investment, potentially signaling a turnaround in the market.

FAQs

Q: What is the current state of the crypto market?

A: The crypto market is currently in a correction, with some analysts predicting a potential decline below $1,900 for ETH.

Q: What is the current stablecoin supply?

A: The cumulative stablecoin supply has surpassed $219 billion.

Q: What is the significance of the FOMC meeting?

A: The FOMC meeting may be decisive for crypto markets, which remain influenced by macroeconomic developments.

Q: What is the current interest rate outlook?

A: Markets are currently pricing in a 98% chance that the Fed will keep interest rates steady, according to the latest estimates of the CME Group’s FedWatch tool.