Bitcoin (BTC) Price Rally Needs Spot ETFs, Coinbase USD Reserves to Sustain Momentum

The price of Bitcoin recorded significant leaps in the past month rising by 14.74% according to data from CoinMarketCap. During this price rally, the premier

The price of Bitcoin (CRYPTO: BTC) recorded significant gains in October, rising by 14.74% according to data from CoinMarketCap. During this price rally, the premier cryptocurrency came close to establishing a new market all-time high, reaching a local peak of $73,149 on October 29.

However, CryptoQuant CEO Ki Young Ju has stated a certain condition is needed to sustain this price gain.

In a series of X posts on November 1, Ki Young Ju stated that stablecoins are currently providing an insufficient amount of liquidity to sustain the present buying pressure on Bitcoin. This observation is particularly important as traders commonly rely on stablecoins to acquire volatile assets such cryptocurrencies, due to their fixed dollar value.

Therefore, a higher stablecoin exchange reserve translates into significant potential for an impending price gain via wide-scale purchase.

However, According to Young Ju, crypto exchanges currently hold only 21% of the total stablecoin market i.e. $34 billion of $166 billion, as most of these tokens are currently being used for storage or remittances. This development represents a slow rise in the stablecoin exchange reserve from $30 billion in September 2021 during the last bull run, despite a 33% growth in total stablecoin shares in the same period.

Currently, the Bitcoin-to-stablecoin reserve ratio is 6.05, similar to the value at the last ATH. Therefore, in order to maintain BTC’s present upward trajectory, Ki Young Ju postulates that the Spot Bitcoin ETFs, alongside Coinbase USD reserves, have to provide much-needed market liquidity.

Notably, the Spot Bitcoin ETFs can be said to be behind Bitcoin’s current rally considering their impressive inflows record of over $5 billion in the past three weeks. Of this figure, BlackRock’s IBIT has led the market recording investments of $4.44 billion in this timeframe.

Ki Young Ju states that it is important the Bitcoin ETFs maintain this momentum as a breakdown in pace will reduce buying pressure, especially from brokerage firms such as Coinbase Prime, which may result in Bitcoin falling back into consolidation.

At the time of writing, Bitcoin was trading at $69,608 reflecting a 1.32% loss in the last 24 hours. However, the asset’s trading volume is up by 25.61% and is valued at $51.56 billion.

For the premier cryptocurrency, a return to above $73,000 remains much on the card, especially with the potential of sustained ETF flows and the upcoming US elections. If pro-crypto Donald Trump secures a victory on the ballot, Bitcoin should definitely establish a new all-time high with expectations of reaching $90,000-$100,000 at the end of 2024.