Analysts suggest that the amount of stablecoins in circulation could be pivotal in determining Bitcoin’s (CRYPTO:BTC) next significant price surge.

According to CryptoQuant, Bitcoin has struggled to rally further since its March peak due to tight U.S. monetary policies that have constrained stablecoin supply.

They emphasise that a more accommodative monetary stance, including lower interest rates and increased stablecoin liquidity, is crucial for Bitcoin to enter a bullish phase.

Currently, stablecoin market capitalisation stands at $161 billion, a fraction of its peak in 2022, with Tether leading the market at $112 billion in supply.

As Bitcoin continues to trade within a range of high $50,000 to low $70,0000 levels, the market awaits potential Fed rate cuts in September, which could impact both stablecoin dynamics and crypto market sentiment moving forward.