Analyst: If US inflation data comes in higher than expected, the market may experience a significant downside volatility

BlockBeats News, January 15th, CoinDesk Market Analyst Omkar Godbole stated that since Monday, Bitcoin (BTC) has seen a rapid rebound from below $90,000, hinting at bullish prospects. However, there is one factor casting doubt on the sustainability of the uptrend; if the upcoming U.S. inflation data exceeds expectations, the market may see significant downward volatility.

This factor is that the supply of major stablecoins has remained stagnant, indicating a lack of new capital inflow into the market. According to Glassnode data, the supply of the top four stablecoins by market cap—USDT, USDC, BUSD, and DAI—has remained stable at around $189 billion, with a net change of only 0.37% in the last 30 days.

The latest slowdown in new liquidity entering through stablecoins suggests a weakening buy environment before the U.S. CPI data release, contrasting sharply with the rebound period from November to December 2023 and the expansion of stablecoin liquidity at the beginning of last year.

Higher-than-expected data could exacerbate concerns that the Fed may not cut rates as much as anticipated. These concerns, combined with Friday's strong jobs report, partly led to BTC falling below $90,000 on Monday.