The European Union continues to express concerns over Trump’s policies, particularly Germany and France, as tensions heighten. President Trump announced his intention to prioritize U.S. interests, employing all necessary instruments. The recent downturn in cryptocurrencies is largely influenced by the rising tension and uncertainty. What should we watch for a potential rebound?
Crypto Market Upswing
For the crypto market to rebound, the gloom over the risk markets must dissipate. The steady rise seen in gold and silver charts for several quarters stems from global economic concerns. From day one, Trump took steps that have shaken the post-World War II global structure.
Expectations surrounding transformations in the global economy have heightened demand for assets like gold and silver. The current environment might get more complicated with the Supreme Court’s verdict expected on Tuesday.
A ruling against tariffs would encourage other countries against Trump, blocking billion-dollar investments and taxes into the U.S.
Failure to cancel the tariffs might lead Trump to impose additional tariffs on the EU over Greenland, and possibly on Canada and other countries opposing him. Although Trump brought up Greenland today, he consistently emphasized last year that Canada is an American state. This situation fosters uncertainty, adversely affecting cryptocurrencies.
For cryptocurrencies to rise, it is essential that the negative atmosphere fueled by Trump normalizes; a sustained recovery seems unlikely without this change.
Indicators of a Rally
CryptoQuant analyst Darkfost pointed out the significance of stablecoin growth as a key indicator for a crypto market rally. After becoming legal in the U.S. through GENIUS last year, stablecoins have caught the attention of banks and major financial institutions. The environment is highly favorable for growth acceleration.
When stablecoins expand rapidly and their market value increases robustly, it often indicates a positive market environment. Consequently, the Stablecoin Supply Ratio (SSR) should be monitored closely as an indicator of a rally.
The analyst shared the chart below, expressing optimism about the current situation.
“This ratio compares the total market value of Bitcoin with the value of stablecoins. When the SSR rises sharply, it indicates that Bitcoin’s purchasing power has weakened relative to its market value, signaling a loss in momentum.
Conversely, a significant drop in the SSR suggests that BTC’s value is low compared to the current market liquidity.
Following the latest BTC correction, the SSR experienced a sharp decline, strongest in this cycle. This means Bitcoin’s market value declined much more aggressively than stablecoins.
Historically, such periods tend to be when market lows form, and this could be the case again. We need to watch if the SSR continues to rise, indicating stablecoin adoption.
However, we are in an extremely uncertain macro environment worsened by geopolitical and trade tensions.
Therefore, monitoring the stablecoin market values, which should not significantly decline, remains crucial.”