The price of Bitcoin (BTC) achieved a new record above $49,000 on Valentine’s Day on Feb. 14, rising to as high as $49,344 on Coinbase.
There are three main reasons Bitcoin surged to a new all-time high, namel high stablecoin inflows, clean break of the $38,000 resistance area, and a prolonged consolidation phase.
High stablecoin inflows were key
Throughout the past several days, despite Bitcoin’s consolidation below $38,000, on-chain analysts pinpointed the continuous increase in stablecoin inflows.
According to data from CryptoQuant, a data analytics platform, the Stablecoin Supply Ratio (SSR) rose significantly as it rallied from the mid-$30,000 region.
The SSR indicator shows the ratio of the market cap of Bitcoin relative to the aggregated market cap of stablecoins.
When the price of Bitcoin rises in tandem with the SSR ratio, then it means it is likely being driven by sidelined capital re-entering the market.
This trend is highly optimistic because it shows that the rally was not just driven by an over-leveraged futures market. In fact, it was genuine demand from the spot market that led the uptrend.
Atop the high stablecoin ratio, analysts also pinpointed the decline in selling pressure coming from miners.
What is also interesting is that miners are not so eager to sell their #Bitcoin the last two weeks.
Either they are convinced it is going up or simply 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 cleanly breaks
Bitcoin was consolidating under the $38,000 resistance area for a prolonged period. This presented a risk to the short-term bull cycle of Bitcoin.
When the price of Bitcoin hovers under a key resistance area for a long time, it increases the…