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Roses are pink, violets are blue, Bitcoin hits $49K and a brand new all-time excessive too

02/14/2021

The worth of Bitcoin broke previous $49,000 to realize a brand new all-time excessive throughout main exchanges.

The worth of Bitcoin (BTC) achieved a brand new file above $49,000 on Valentine’s Day on Feb. 14, rising to as excessive as $49,344 on Coinbase.

There are three foremost causes Bitcoin surged to a brand new all-time excessive, namel excessive stablecoin inflows, clear break of the $38,000 resistance space, and a chronic consolidation section.

BTC/USD 4-hour worth chart (Coinbase). Supply: TradingView.com

Excessive stablecoin inflows have been key

All through the previous a number of days, regardless of Bitcoin’s consolidation under $38,000, on-chain analysts pinpointed the continual enhance in stablecoin inflows.

Based on knowledge from CryptoQuant, a knowledge analytics platform, the Stablecoin Provide Ratio (SSR) rose considerably because it rallied from the mid-$30,000 area.

The SSR indicator reveals the ratio of the market cap of Bitcoin relative to the aggregated market cap of stablecoins.

When the worth of Bitcoin rises in tandem with the SSR ratio, then it means it’s doubtless being pushed by sidelined capital re-entering the market.

Stablecoin Provide Ratio. Supply: CryptoQuant

This pattern is extremely optimistic as a result of it reveals that the rally was not simply pushed by an over-leveraged futures market. In reality, it was real demand from the spot market that led the uptrend.

Atop the excessive stablecoin ratio, analysts additionally pinpointed the decline in promoting stress coming from miners.

The mixture of the decrease promoting stress from miners and the growing stablecoin inflows into exchanges catalyzed the continuing Bitcoin rally.

$38,000 resistance cleanly breaks

Bitcoin was consolidating beneath the $38,000 resistance space for a chronic interval. This introduced a danger to the short-term bull cycle of Bitcoin.

When the worth of Bitcoin hovers beneath a key resistance space for a very long time, it will increase the chance of BTC dropping to a decrease assist space to faucet decrease liquidity.

That is partially the rationale why Bitcoin recurrently dropped to round $44,000 earlier than its eventual impulse rally above $38,000.

Lengthy consolidation was helpful for BTC worth breakout

A comparatively lengthy consolidation interval usually results in two eventualities: a extreme breakdown or a significant breakout.

If Bitcoin rallies with out sturdy fundamentals to assist the rally, there’s a greater likelihood that the consolidation results in a deep correction.

However, within the case of Bitcoin within the final three days, its consolidation section beneath $38,000 was backed by rising stablecoin inflows, a excessive Coinbase premium, and a usually excessive buying and selling quantity throughout each spot and futures markets.

Therefore, regardless that the futures market stays extremely leveraged and overcrowded, BTC has been capable of push via the resistance space regardless of the danger of an extended squeeze.

Within the foreseeable future, there are a number of causes that make the rally sustainable. First, the stablecoin inflows will not be slowing down.

Second, right now’s rally reversed the bearish market construction to a bullish short-term pattern throughout decrease time frames.

So long as Bitcoin stays above the $38,000 degree, which has changed into a assist space, its near-term bullish market construction would stay intact.