Bitcoin (BTC) has once again regained its upwards momentum and was trading 8.34% higher at $36,679.38 at press time.
The second-largest cryptocurrency by market cap Ethereum (ETH) touched its all-time high on Tuesday evening and was trading 12.01% higher at $1,549.12. Various metrics point to Bitcoin’s new upwards movement being sustainable.
Robust Demand: Demand for the apex cryptocurrency is surging even as only 26,000 BTC have been mined so far this year. Grayscale Investment Trust acquired 40,000 BTC in the same period, according to blockchain intelligence provider Glassnode. The Grayscale Bitcoin Trust GBTC closed 8.39% at $36.80 on Friday.
Coins Moving From Exchanges: The amount of BTC held across all exchanges has fallen to a 2.5 year low of 2,349,040 as of Monday, as per Glassnode data. This means sell-side liquidity is diminishing, removing downwards pressures.
Bitcoin broke out of the 3-day range, above $35k.
— Joseph Young (@iamjosephyoung) February 2, 2021
- Massive Coinbase outflow spotted
- Worst is over in terms of selling pressure
- Stablecoin inflows rising
- But February historically a weak month for $BTC
So what to expect in February? (1/2)
Stablecoin Inflow On The Rise: On Wednesday, Ki Young Ju, CEO of on-chain data and analytics firm CryptoQuant, noted that there was a marked rise in the inflow of stablecoins into exchanges. The total number of deposits to all exchange wallets towered above the 36,500 mark.
What happened before the price surge:
— Ki Young Ju 주기영 (@ki_young_ju) February 3, 2021
1. No bearish signals from miners
2. Stablecoin deposit signals five times in a row
3. Significant Coinbase outflow pic.twitter.com/xNiIiTeb1e
Glassnode noted that the number of USD Coins (USDC) on exchanges have begun to rise rapidly in 2021, which is bringing more “buying power” into the cryptocurrency market.
The number of USDC on exchanges rose by over 112% in January, growing from $431 million to over $915 million, as per Glassnode.
Bullish Options: Dominant call activity prevailed on the day ETH reached its all-time high, signifying a bull market, according to Cointelegraph. Analysts at Laevitas explained the options action on Twitter.
#ETH 1-month VIX has reset to levels last seen in early January while price is stabilising close to ATH.
— Laevitas (@laevitas1) February 2, 2021
80% of @DeribitExchange volume today is dominated by calls, this looks like it's about to pop pic.twitter.com/sHN5JnB2jZ
Cryptocurrency analyst Joseph Young pointed out that the options market is now about a quarter of futures market open interest for Bitcoin.
“Watch out for options, it has a big impact on markets,” Young said on Twitter.
Related Link: Can Bitcoin Be The Next GameStop? The Word On The Street
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