According to professional trader Michaël van de Poppe, crossing the $38,000 mark will allow Bitcoin to reach new highs
Bitcoin (BTC) extended its recovery today, regaining the $38,000 level. Moreover, the weekly candle is green for the fifth week in a row, despite the recent 28% crash.
Meanwhile, cryptocurrency exchanges are seeing a surge in stablecoin deposits, according to data from CryptoQuant. This influx could act as a short-term catalyst for Bitcoin, as capital that has so far remained on the sidelines could be pouring into the BTC market.
Stablecoin flow to exchanges
Why stablecoins are important for the crypto market
In cryptocurrency markets, many traders sell their crypto assets in exchange for stablecoins rather than for real fiat money. The most popular stablecoin by far is Tether (USDT), which is pegged to the value of the US dollar and widely used in most trading platforms.
Bank transfers and cash deposits are time-consuming and most exchanges today require the completion of complex Know Your Customer (KYC) verification processes in order to withdraw fiat money. This is why investors, both large and small, find stablecoins much more convenient than traditional money.
The high demand for such instruments has sent the valuation of Tether soaring, whose market cap is now over $24 billion.
Huge stablecoin flows to exchanges
Stablecoin deposits to trading platforms have increased significantly in the last 24 hours. CryptoQuant tracks exchange wallets, observing stablecoin inflows and outflows.
Stablecoin reserves in exchanges
On all major exchanges, stablecoin deposits increased significantly just before Bitcoin’s price began to recover. Yesterday, BTC fell as low as $32,500 after futures contracts worth nearly $1 billion were liquidated.
But investors quickly bought into the dip, as evidenced by increased stablecoin deposits and rising open interest in Bitcoin futures markets. As a result, the trend quickly reversed, leading to a price increase of more than 10% in just a few hours: it currently sits at around $38,000.
Open interest of BTC futures
What does the future hold for us?
Crypto analyst Alex Saunders also reported that stablecoins are „flooding the exchanges,“ an event often indicative of an ongoing bullish trend.
Shortly before the upswing, Michaël van de Poppe, a professional trader at the Amsterdam Stock Exchange, predicted that a breach of the $38,000 mark would likely lead to new all-time highs for Bitcoin:
„Bitcoin hasn’t changed much. It has turned the level at $33,000 from resistance to support, and is therefore headed for a new test of the area around $37,000 and $38,000. This level has to be overcome: if this happens, we will probably see new all-time highs. If not, more consolidation.“
Bitcoin’s rally coincides with the reopening of Grayscale’s products: if the cryptocurrency’s price continues to rise, it could prompt more large investors to gain exposure in BTC via the Grayscale Bitcoin Trust (GBTC).