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Bitcoin reaches $60k with strong momentum

Photo of: Joseph Stone
by Joseph Stone

Bitcoin had a weekend of strong gains. It set a new all-time high at $61,800. The cryptocurrency has since fallen back below the $60K level, but growth is expected.

2021, a new year of records for Bitcoin? This trend is indeed confirmed. Every month brings a new record and a new ATH (All-Time High). In February, BTC reached $50,000 for the first time.

Four weeks later, Bitcoin has set another record. On the weekend of March 13 and 14, the crypto-asset broke the $60,000 barrier. Latest ATH to date: $61,800 – and even $61,950 on Binance.

Since then, however, Bitcoin is back below $60K, at around $58K. This is due in particular to the significant amount of liquidity currently available in the market. Thus, whales and wealthy investors tend to take profits on their positions.

Nevertheless, the first of the cryptocurrencies could in the short term return to these highs. And even continue its rise. To anticipate this, analysts are relying on a key indicator in particular. This is the increase in stablecoin deposits on exchanges.

What is the correlation between stablecoins and Bitcoin? It has to do with the way exchanges work and the practices of traders. For example, explains Cointelegraph, traders usually hedge their holdings with stablecoins, including Tether and USDC.

This option is preferred over cashing out withdrawals from bank accounts. On the other hand, cash deposits take an average of 3-7 days to process through exchanges. Speed is essential for a trader, so they will opt for crypto over cash to inject new capital into the market.

“There were a lot of stablecoin inflow transactions to the exchanges, very frequently. 100-287 stablecoin deposits in each ETH block (15 seconds). I think we will see more traction on $BTC or $ETH in the short term,” so considers Ki Young Ju, CEO of CryptoQuant.

Thus, an increase in the value of Bitcoin without a parallel increase in the inflow of stablecoins tends to generate unsustainable growth and thus a correction in the short term. This trend was confirmed on March 13 and 14.

However, these stablecoin deposits on the exchanges are now in place. For observers, a new bullish phase for BTC is therefore more likely in the next few days.