Bitcoin price is currently appearing to be extremely bullish as the price levels have surged beyond $21,000. Until the end of 2022, the price remained under an extremely bearish influence which was flipped on the very first day of 2023.
Considering the current trade setup, it appears that the bullish momentum was induced to prevent the BTC price to mark new lows. But will the induced momentum hold the price high? If yes, then for how long?
The crypto verse is well acquainted with the control price action and the present price rise is believed to be one among them. Bitcoin and Stablecoins are the most traded assets every day, sharing more than 50% of the volume. However, the circulating supply of the stablecoins has dropped heavily during the times when BTC prices consolidated within a very narrow range.
A popular analyst, tedtalksmacro, discovered the correlation between the drop in the stablecoin reserves and the rising BTC price.
“Intersting divergence between Bitcoin price + USD stablecoin supply has appeared.
Seems that USD stabelcoins were swapped heavily for BTC between November – January and that led to decreased stablecoin supply and set the floor for BTC,”
Therefore, now when the speculations of a programmed rally hover over the star crypto, the possibility of a significant plunge also emerges. Hence the market participants can be more cautious and keep a close watch on the Bitcoin (BTC) price movement.