Bitcoin (BTC) hit a new high of $ 49,000 on Valentine’s Day February 14th, and rose to $ 49,344 on Coinbase.
There are three main reasons why Bitcoin rose to an all-new high, a rampant flow of stablecoins, a net breakout into the $ 38,000 resistance zone, and a long consolidation phase.
The large influx of stablecoin was a major factor
In recent days, despite integrating Bitcoin below $ 38,000, network analysts have indicated a steady rise in steady flows.
According to data from CryptoQuant, a data analytics platform, the SSR has grown significantly as it pooled in an area with an average price of $ 30,000.
The SSR indicator shows the relationship between Bitcoin’s market capitalization and the total market capitalization of the crowd.
When the bitcoin price rises in line with the SSR, this means that it will likely be driven back into the market by sideways capital.
This trend is very optimistic as it shows that the rally was not only driven by the highly indebted futures market. In fact, the trend has resulted in real demand in the spot market.
In addition to the increase in the stability of the currency, analysts also indicated a decrease in pressure from the two miners to sell.
The combination of low pressure from miners and an increased influx of stock exchange tokens has been a catalyst for the continued rally in Bitcoin.
The $ 38,000 resistance breaks clean
Bitcoin has been consolidating below the $ 38,000 resistance band for an extended period. This created risk for Bitcoin’s short-term rally.
When Bitcoin price has been below a significant resistance area for a long time, it increases the likelihood of Bitcoin falling into a lower support zone and losing less liquidity.
In part, this is why Bitcoin regularly plummeted to around $ 44,000 before the eventual momentum rose above $ 38,000.
Long-term consolidation favored higher Bitcoin prices
A relatively long consolidation period usually leads to two scenarios: major breakdown or major breakdown.
If Bitcoin rallies without strong fundamentals supporting the rally, there is a good chance the consolidation could lead to a deep correction.
However, in Bitcoin’s case, over the past three days, the consolidation phase under $ 38,000 has been supported by increased stable cash flows, on top of higher Coinbase, and generally strong trading volume in both the spot and futures markets.
Therefore, while the futures market remains extremely busy and crowded, BTC has managed to overcome resistance despite the risks of long-term pressure.
There are many reasons for the foreseeable future that will make the process sustainable. First, the flow of stablecoins is not slowing down.
Second, today’s rally changed the bearish market structure into a short-term bullish trend in a shorter time frame.
As long as Bitcoin stays above the $ 38,000 level, which has become a support zone, the long-term stable market structure will remain intact.