Bitcoin (BTC) price hit a new record above $ 49,000 on Valentine’s Day February 14, and rose to $ 49,344 on Coinbase.
There are three main reasons for Bitcoin to rise to an all-new high: the highly stable Name coin inflows, the clean breakout of the $ 38,000 resistance zone, and the prolonged consolidation phase.
Rising stable currency inflows was the key
Over the past several days, despite Bitcoin consolidating below $ 38,000, analysts on the chain have identified the continued increase in stable currency flows.
According to data from CryptoQuant, the data analytics platform, SSR increased significantly, up from the mid-$ 30,000 area.
The SSR indicator shows the ratio of Bitcoin’s market value to the aggregate market value of stablecoins.
When the bitcoin price increases in tandem with the SSR, this means that it is likely being driven by margin capital to the market.
This trend is very optimistic as it shows that the rally was not only driven by the over-leveraged futures market. In fact, it was the real demand from the spot market that led the upside.
On top of the high steady currency ratio, analysts also identified a decrease in selling pressure coming from the two metals.
What’s also interesting is that miners are not eager to sell them # Bitcoin The past two weeks.
Either they are convinced it is rising or they simply ran out of bullets. pic.twitter.com/GDYzP33948
Lex Moskovsky (mskvsk) February 12, 2021
The combination of lower selling pressure from the two metals and increased stable currency flows to exchanges spurred Bitcoin’s continued rally.
The $ 38,000 Resistance is clearly broken
Bitcoin has been consolidating below the $ 38,000 resistance zone for a long time. This presented a risk to Bitcoin’s short-term bullish cycle.
When bitcoin price hovers below a major resistance area for an extended period, it increases the possibility that BTC will fall into a lower support zone to take advantage of the lower liquidity.
This is partly the reason why Bitcoin regularly plummeted to around $ 44,000 before its final rally, rising above $ 38,000.
The long consolidation was beneficial for the BTC price breakout
Typically, the relatively long consolidation period leads to two scenarios: a severe breakdown or a major breakout.
If Bitcoin rises below strong fundamentals to support the rally, there is a higher chance that the consolidation could lead to a deep correction.
But in the case of Bitcoin in the past three days, the consolidation phase under $ 38,000 was supported by higher stable coin flows, a higher Coinbase premium, and generally higher trading volume across the spot and futures markets.
Hence, although the futures market remains very leveraged and crowded, BTC has managed to push through its resistance zone despite the risk of a prolonged squeeze.
In the foreseeable future, there are many reasons why the rally could be sustainable. First, stable currency flows are not slowing down.
Second, today’s rally reverses the bearish market structure to a short-term uptrend across lower time frames.
As long as Bitcoin remains above the $ 38,000 level, which has turned into a support zone, the bullish market structure in the near term will remain intact.