After a slow couple of weeks, Bitcoin appears to finally be on the move again, as its price is inching closer to $35,000. According to Su Zhu, the chief executive of Three Arrows Capital, the biggest position holder in Grayscale Bitcoin Trust (GBTC), the next key levels are now $48,000 and $72,000.
Bitcoin’s Stablecoin Supply Ratio (SSR), a ratio of the total value of all Bitcoins vs. stablecoins, has been declining in 2021. As more stablecoins are being minted. This low SSR indicates that more buying power is ready to flow into BTC and other assets.
These newly minted stablecoins already are being deposited onto exchanges. The result can be seen in the price of Bitcoin, which is up 2.71%, and Ether, which is making another attempt at its all-time high.
Not only that, but the Bitcoin supply kept in cryptocurrency exchange wallets has decreased to a 30 month low, which is also a bullish signal.
As this supply falls, it shows that Bitcoin is getting more and more holders as traders diminish. If demand for Bitcoin continues to rise amid the supply bottleneck, the price will eventually rally to higher levels.
What’s more, a big outflow was recorded from the largest U.S. exchange Coinbase. Which is speculated to be from Guggenheim’s proposed SEC filing to buy $500 million in Bitcoin via GBTC. Grayscale, the largest asset manager, actually uses Coinbase Custody for its clients’ digital assets.
Bitcoin Strong Bull Signal
The outflow from Coinbase was massive at 15,000 BTC at an entry price of $32,400. Ki-Young Ju, the CEO of data provider CryptoQuant, noted the supply likely went to custody wallets and could have been fueled by OTC deals from institutional investors giving “the strongest bullish signal.”
Meanwhile, on-chain analyst Willy Woo is also turning bullish. Saying “the market has completed a full purge of overheatedness”. The profit-taking is expected to be completed as SOPR (Spent Output Profit Ratio) has touched the 1.0 line with “coins moving between investors no longer carry profit”.
For SOPR to be pushed lower, investors would have to be willing to sell at a loss, and thus, spark a bearish phase. However, Woo says that is ”very unlikely as we are bounded by the $29k price floor.”
Bitcoin could be on the verge of another breakout. Its 4-hour chart shows the leading cryptocurrency making its way above $34,000 after bouncing off the 100 Simple Moving Average Support.
A break above the short term resistance would leave Bitcoin with open-air to soar to highs around $36,000 before the bullish leg to $38,000 and $40,000 is formulated.