In a nuanced shift in cryptocurrency markets, Bitcoin (BTC) appears to be entering a stabilization phase with indicators suggesting traders are moving into an accumulation period.

Analysts are noting the tepidly good news despite price fluctuations that have seen the leading cryptocurrency trading at $66,300, down 0.7%, but maintaining a 7% gain over the past two weeks.

Ethereum, meanwhile, is down 2% at $2,570, though it too has seen a rise of 5.5% over the last two weeks, according to data from CoinGecko.

Market analysts point to several key factors supporting this stabilization thesis. The $1.7 billion reduction in Circle’s USDC has been more than offset by significant liquidity indicators, including substantial stablecoin inflows totaling $38 billion this year—notably surpassing the $21 billion that has flowed into Bitcoin Spot ETFs.

According to 10x Research, the market is absorbing a number of factors before potentially resuming an upward trajectory. “Instead of turning overly pessimistic, we believe the market needs time to digest the higher bond yields before Bitcoin can resume its upward movement,” said 10x Research in a note to Decrypt. 

They emphasized that while funding rates for Bitcoin and Ethereum have risen to 10%, spot prices have lagged, and retail participation remains subdued. “We’d like to see multiple indicators aligning to confirm bullish momentum, but this isn’t a significant concern. The market likely just needs a few days to absorb these factors.”

Adding to this, total stablecoin inflows have been a key driver of liquidity this year. “With $36 billion in stablecoin inflows since the Bitcoin Spot ETF launch, liquidity remains robust,” noted 10x Research, highlighting that these inflows continue to provide upward pressure on Bitcoin’s price.

Valentin Fournier, an analyst at BRN, also pointed to institutional activity as a key indicator.

“After a streak of seven consecutive days of ETF inflows totaling over $2 billion, Bitcoin’s ETF inflows have taken a temporary pause,” Fournier explained. “While this indicates a minor dip in institutional demand, we’re still seeing accumulation at the current price level, which suggests a potential uptrend once the market consolidates.”

Fournier also noted that while Bitcoin has retreated to $67,000 after being rejected at the $70,000 resistance level, this softer rejection suggests traders are accumulating in preparation for a bullish breakout. “The upcoming U.S. presidential election, potential interest rate cuts, and global stimulus efforts could drive cryptocurrencies to new highs in the weeks ahead,” he added.

However, Alex Kuptsikevich, senior market analyst at FxPro, urged caution as Bitcoin hovers near a key support level. “Bitcoin is close to a local support level at $66,800. A break below this support could open the way for a deeper correction toward $65,500,” Kuptsikevich said. 

Despite the recent pullback, he emphasized Bitcoin’s dominance in the market, noting that BTC’s share of cryptocurrency market capitalization has risen to 57.3%, the highest since April 2021.

The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market capitalization, fell nearly 2% while bitcoin lost 1%. Traders, however, foresee a run to $80,000 in the coming weeks as the U.S. elections draw near, regardless of who is elected president.

GameStop’s short squeeze in 2021 taught the Securities and Exchange Commission (SEC) several key lessons. Among those highlighted in a Monday speech by SEC Chair Gary Gensler was the need to modernize equity markets, in part by embracing shorter settlement times.

A retail-led movement to bet big against Wall Street short sellers caused GameStop’s stock price to spike nearly four years ago amid the “meme stock” craze. Forced to hold or sell shares skyrocketing in price, restrictions imposed by several brokerage firms blunted the rally that was later enshrined in stock market history and recounted in books and films.

Gensler, an unwavering critic of the digital assets industry, partly pinned the restrictions on a lack of market efficiency. Ultimately, a shift toward shorter settlement times—that experts say blockchains benefit from—improved upon mechanics that stifled some GameStop investors.  

“Many everyday investors lost access to the market at a critical time,” Gensler said. “The longer it takes for a trade to settle—the slower the plumbing—the more risk our markets assume.”

When purchasing or selling a stock on a venue like the New York Stock Exchange, there is a delay between when the transaction is made and when it becomes fully processed across a series of intermediaries, including a broker-dealer, clearing agency, and exchange. 

Notably, the SEC has accused crypto exchanges like Binance and Coinbase of fulfilling several of these roles at once, without proper registration, while facilitating securities transactions. Both companies have denied the regulator’s claims amid ongoing battles in federal courts.

Once conducted through paper checks and physical certificates, the settlement window for securities has been shortened with SEC rule changes over time. Commonly referred to as T+2, a two-day settlement window was reduced in May, making what Gensler said was “a real difference” for everyday investors.

At the same time, the shift to T+1 influenced the relationship between brokers, which match buyers and sellers, and clearinghouses that facilitate the exchange of securities and payments.

Margin calls from clearinghouses led some brokers to restrict purchases of GameStop stock during its famed short squeeze in 2021. But the “amount of margin, or collateral, that must be placed with the clearinghouse” was reduced significantly with T+1’s adoption, Gensler said.

Gensler’s GameStop reflection followed crypto-focused remarks from Federal Reserve Governor Christopher Waller last week. Discussing the merits of decentralized finance (DeFi), he described how intermediaries have historically provided value—but now face competition. 

As reflected in the popularity of centralized crypto exchanges, Waller posited that DeFi could play a complementary role to existing financial markets, rather than replace legacy systems. Along those lines, he said distributed ledger technology (DLT) like blockchain could be an “efficient and faster way to do recordkeeping,” while smart contracts flatten trade structures.

“Smart contracts can effectively combine multiple legs of a transaction into a single unified act,” Waller said. “This can provide value, as it can mitigate risks associated with settlement.”

Companies like tZERO are building blockchain-based marketplaces for private securities. The Utah-based firm gained approval from the SEC and Financial Industry Regulatory Authority (FINRA) to operate as a custodian for digital assets sold as securities last month.

In early 2025, the firm plans to launch with a “full digitization” of its Series-A preferred equity. But Wall Street tastemakers have visions for a crypto-based market extending far beyond that.

BlackRock CEO Larry Fink hailed tokenization as the “next generation for securities” in 2022. Using a digital representation of an asset to conduct trades on a blockchain, he said the process would provide market participants with “instantaneous settlement” and “reduced fees.”

Alongside the crypto’s rise, financial firms have looked at other qualities inherent to blockchains, such as the 24/7 schedule that they operate under within the context of trading. Crypto markets don’t close, which can provide both opportunities and risks alike.

In April, the Financial Times reported that the New York Stock Exchange was exploring round-the-clock trading. The development would be a significant break from the exchange’s regular six-and-a-half hour trading window, extended as recently as 1985.

Edited by Andrew Hayward