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Bitcoin Brings Roses: Hits $49K, a New All-Time High

On Valentine’s day, February 14, the price of Bitcoin achieved a new all-time high. A new record, hitting a s high as $49,344 on Coinbase.

At 11:07 GMT on Sunday, the coin traded at $49,027.

It appears that there were three main reasons why the coin rose to a new record high on the day of love. They are: stablecoin inflows; clean break of the $38,000 resistance area; and a prolonged consolidation phase.

 

Stablecoins spike in inflows

According to CryptoQuant, data provided shows that Stablecoin Supply Ratio (SSR) rose significantly as it rallied from the mid-$30,000 region. The SSR indicator indicates the market capitalization of Bitcoin in comparison with the aggregated market of stablecoins. When the price of Bitcoin rises in comparison with the SSR ratio, it suggests sidelines capital re-entering the market.cryptoquant miners selling pressure

This shows that it was genuine demand from the spot market that led to the rise. Not just an oversubscribed futures market.

Analysts have also pointed out that the selling pressure coming from miners have reduced drastically.

This lower selling pressure from miners and the increase in inflow of stablecoins are responsible for catalysing this current bull rally.

$38,000 clean break

For an extended period, Bitcoin consolidated around the $38k resistance area. A longer time spent around a resistance area increases the probability of BTC dropping to a lower support area to tap lower liquidity.

This may explain why the king cryptocurrency kept dipping to around $44,000 before rising to an impulse rally above $38,000.

Long consolidation before breakout

Generally, a long consolidation around a price area leads to an extreme breakdown or a skyrocketed bull run.

A high trading volume in the spot and futures market and a rising inflow of stablecoins backed a consolidation above $38,000.

Despite the futures market being overcrowded, the price of the pioneer cryptocurrency has been able to break a resistance level notwithstanding a long squeeze.

Institutional demand

For weeks now, Elon Musk and Tesla have been major news in the crypto market. It is believed that Tesla’s decision to put 10% of its cash reserve in Bitcoin created a recursive loop forcing other big corporates into the market. In the last few days, Mastercard, BNY MELLON, Visa, Apple, Twitter, etc have all shown interest in the crypto market in one way or the other.

Raoul Pal, the chief executive of Real Vision and a former Goldman Sachs head of hedge fund sales in Europe, stated that

Remember that as the market cap of BTC rises, it forces more institutions into it. The more institutions that adopt it, the more the others have to and the harder it is for regulators to stop it. A perfect reflexive loop with the little guy front running it all

For now, what is clear is that as long as Bitcoin continues to stay above the $38,000 support level, it would experience a bullish momentum in the near term.

If you have any questions and comments on Bitcoin today, use the form below to reply


© IbrahimAnifowoshe for Commodity Blog, 2021. | Permalink | No comment |
Published under: Technical Analysis

Via Commodity Blog https://bit.ly/2OA2lVq

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