The price of Bitcoin (BTC) accomplished a new record above $49,000 on Valentines Day on Feb. 14, increasing to as high as $49,344 on Coinbase.
There are three main factors Bitcoin rose to a new all-time high, namel high stablecoin inflows, clean break of the $38,000 resistance location, and a prolonged combination phase.
BTC/USD 4-hour rate chart (Coinbase). Source: TradingView.com
High stablecoin inflows were crucial
Throughout the previous a number of days, in spite of Bitcoins debt consolidation listed below $38,000, on-chain analysts determined the constant boost in stablecoin inflows.
According to data from CryptoQuant, an information analytics platform, the Stablecoin Supply Ratio (SSR) rose significantly as it rallied from the mid-$ 30,000 area.
The SSR indicator shows the ratio of the market cap of Bitcoin relative to the aggregated market cap of stablecoins.
When the rate of Bitcoin increases in tandem with the SSR ratio, then it means it is most likely being driven by sidelined capital returning to the marketplace.
Stablecoin Supply Ratio. Source: CryptoQuant
This pattern is extremely optimistic since it reveals that the rally was not simply driven by an over-leveraged futures market. In truth, it was real need from the area market that led the uptrend.
Atop the high stablecoin ratio, experts likewise pinpointed the decrease in selling pressure originating from miners.
What is also fascinating is that miners are not so excited to offer their #Bitcoin the last 2 weeks.
Either they are persuaded it is going up or merely are out of bullets. pic.twitter.com/GDYzP33948
— Lex Moskovski (@mskvsk) February 12, 2021
The combination of the lower selling pressure from miners and the increasing stablecoin inflows into exchanges catalyzed the ongoing Bitcoin rally.
$ 38,000 resistance easily breaks
Bitcoin was consolidating under the $38,000 resistance area for a prolonged duration. This provided a risk to the short-term bull cycle of Bitcoin.
When the rate of Bitcoin hovers under an essential resistance location for a long period of time, it increases the probability of BTC dropping to a lower assistance location to tap lower liquidity.
This is partially the reason Bitcoin frequently dropped to around $44,000 prior to its ultimate impulse rally above $38,000.
Long consolidation was advantageous for BTC rate breakout
A fairly long combination period usually results in 2 circumstances: a major breakout or a serious breakdown.
If Bitcoin rallies without strong basics to support the rally, there is a bigger possibility that the consolidation leads to a deep correction.
But, when it comes to Bitcoin in the last three days, its consolidation phase under $38,000 was backed by increasing stablecoin inflows, a high Coinbase premium, and an usually high trading volume across both area and futures markets.
Thus, despite the fact that the futures market remains overcrowded and highly leveraged, BTC has actually had the ability to press through the resistance area in spite of the risk of a long squeeze.
In the foreseeable future, there are a number of reasons that make the rally sustainable. First, the stablecoin inflows are not decreasing.
Second, todays rally reversed the bearish market structure to a bullish short-term pattern across lower time frames.
As long as Bitcoin stays above the $38,000 level, which has developed into a support area, its near-term bullish market structure would stay intact.
Title: Roses are red, violets are blue, Bitcoin hits $49K and a brand-new all-time high too
Sourced From: cointelegraph.com/news/roses-are-red-violets-are-blue-bitcoin-hits-49k-and-a-new-all-time-high-too
Published Date: Sun, 14 Feb 2021 10:00:00 +0000 Share on TwitterShare on FacebookShare on LinkedInShare on Pinterest2021s Most Anticipated Growth & Wealth-Building OpportunityJoin Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency TogetherCLAIM YOUR SEAT!Read More