At present, we see a sideways movement in Bitcoin. When we closely analyse the daily chart of Bitcoin/USD, what we see is the price of BTC oscillates between $71,700 and $58,000. It was after the BTC price touched its peak in mid-March that the crypto entered the sideways movement. What is the reason for this stagnation? One of the prime reasons definitely is the tighter monetary policy of the United States.  

For a crypto trader, it is important to understand this situation in a clear way. Or else, it will be difficult for them to rightly foresee the future price movements of BTC. 

Impact of US Monetary Policy on Bitcoin 

First, we should understand the impact of the US Monetary Policy on BTC.  The US has been tightening its monetary policy since March 2022. The natural outcome of the action is the consistent increase in interest rates. 

A social media user, identified as MAC.D, in a X post, says that as interest rates in the US went up, the circulation of stablecoins decreased. As everybody knows, a liquidity crisis is the primary consequence of a stablecoin scarcity. Last year, it was stablecoin liquidity that helped the price of Bitcoin to stay strong.     

Future Prospects for Bitcoin 

At this stage, it is important to realise that it is difficult to see a strong Bitcoin upward rally until a positive movement is seen in the liquidity and circulation indexes of the stablecoin market. For this to happen, what is urgently needed is a more supportive US monetary policy. 

The expert advises investors to take a long-term view of the Bitcoin market. 

In short, if you want to predict when the next big move will happen in the Bitcoin market, you only need to closely watch every development happening in the US monetary policy and stablecoin circulation.

Read Also: Santiment Reveals Top Three Altcoins to Buy in the Midterm

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