Bitcoin to remain in consolidation as fiat-to-stablecoin conversions stay quiet, analysts warn

Markus Thielen, an independent analyst, said the drop can be attributed to the Federal Reserve's hawkish pivot in mid-December, which is likely to dampen investor sentiment. With fiat-to-stablecoin conversions still under control, Bitcoin and other cryptocurrencies are expected to continue consolidating, Thielen warned.

Despite the end of the quieter holiday period, stablecoin inflows have yet to show a meaningful rebound. Even after the holiday period ends, stablecoin inflows have yet to rebound meaningfully. Thielen emphasized that this metric is important, since an increase in the stable of coins “usually indicates a rising demand for cryptocurrencies. ” However, the current increase in minting is small, and sustainability is still uncertain, he admitted.

Thielen remains cautious, noting that while any increase in minting is a good sign, it is still not enough to indicate a clear path for BTC or other cryptocurrencies. For now, the market is likely to remain in a holding pattern until more significant trends emerge in stablecoin inflows.

Meanwhile, spot currency Bitcoin in the United States recorded its third consecutive day of outflows this year, as Bitcoin fell below $90,000 amid broader risk sentiment in the market. As crypto.news reported, the 12 spot Bitcoin ETFs recorded nearly $285 million in net outflows on January 13, extending the outflow streak to three days, when more than $1 billion in cash.