Bitcoin (BTC) hit a new high above $ 49,000 on Valentine’s Day (Feb 14), reaching $ 49,344 on the Coinbase platform.
There are three main reasons why Bitcoin has risen to a new peak. The massive influx of stablecoins into exchanges, a clean breakout of the $ 38,000 resistance zone, and a long phase of consolidation.
4 hour chart for BTC / USDT (Binance). Source: TradingView.com
Higher stable currency flows played a major role
Over the past few days, despite Bitcoin’s consolidation below the $ 38,000 mark, Analysts in the chain identified the continued rise in stable currency flows to exchanges.
According to data from CryptoQuant, a data analysis platform, the Stable Currency Supply Ratio (SSR) It increased significantly as it rose from the area near $ 30,000.
The SSR indicator shows the ratio of Bitcoin’s market capitalization to total market capitalization of stablecoins.
When Bitcoin rises in tandem with SSR, this means that it will likely be driven by marginalized capital re-entering the market.
Stable coin bid ratio. Fuente: cryptocurrency
This trend is very optimistic as it shows that the move was not only driven by the over-leveraged futures market. In fact, it was organic demand from the spot market that led the upward trend.
In addition to the high percentage of stable currencies entering stock exchanges, Analysts also noted the easing of selling pressure from the miners.
What’s also interesting is that the miners have not been in a hurry to sell their Bitcoin for the past two weeks.
Either they are convinced it will rise or they are out of bullets. pic.twitter.com/GDYzP33948
Lex Moskovsky (mskvsk) February 12, 2021
What’s also interesting is that miners have not been in a hurry to sell their Bitcoin for the past two weeks.
Either they are convinced it will rise or they are out of bullets.
The combination of lower selling pressure from the two metals and an increase in stable currency flows to the exchanges spurred the current bitcoin price appreciation.
The $ 38,000 resistance saw a clean breakout
Bitcoin has been consolidating below the $ 38,000 resistance zone for an extended period. This presented a short term risk to Bitcoin’s bullish cycle.
When the bitcoin price remains below its main resistance area for a long time, the possibility increases for BTC to fall into a lower support zone to take advantage of liquidity at those levels.
This is part of the reason Bitcoin regularly plummeted to levels near $ 44,000 before its eventual rise above $ 38,000.
The long consolidation phase was instrumental in the bitcoin price breakout
Typically, a relatively long consolidation period results in two scenarios: big low or high.
If Bitcoin recovers without strong fundamentals to support the rally, there is a strong chance that the consolidation could lead to a deep correction.
However, in the case of Bitcoin over the past three days, the consolidation phase under $ 38,000 was supported by higher stable currency flows, a high Coinbase premium, and generally high trade volume in the spot and market markets.
So, Although the futures market remains crowded with leverage, BTC has managed to break out of its resistance zone despite the risk of choking in a long position.Long press).
In the near future, there are several reasons why the rally is sustainable. First, stable currency flows do not decrease.
Secondly, Today’s movement reversed the bearish market structure into a short term uptrend on shorter time frames.
As long as Bitcoin remains above the $ 38,000 level, which has become a support area, its short-term bull market structure will remain intact.