The price of Bitcoin fell below $60,000, but this may be brewing a bigger rebound?

in hive-110112 •  4 years ago 

Bitcoin price fell below $ 60,000, but this might result in a bigger rebound? In the past 2 hours 14.69600: 0004: 50

After Bitcoin price hit record highs again last week, it fell below $ 60,000 on Sunday, but the steady flow of Tokens shows that this really isn't a big deal.

One day after Bitcoin's price hit an all-time high of $ 61,950, its rise slowed and fell below $ 60,000 on March 14. However, the data on the chain suggests that the upward trend in Bitcoin's price could continue in the short term.

Why do you think the short-term trend of Bitcoin price is optimistic? Mainly as the number of stable tokens flowing into the trading platform has increased.

Although the high financing interest rates of bitcoin futures and the overcrowding of the market have caused bitcoin prices to fall, the inflow of over-the-counter capital into the crypto market could further encourage bitcoin development.

Analysis of Bitcoin's drop in under $ 60,000

When Bitcoin receives widespread attention and reaches a new high price, market interest will be stimulated even more.

In today's hot crypto market, Bitcoin liquidity is still very abundant. For whales and high net worth investors, this is an ideal period of profitability to hold positions.

Bitcoin financing interest rates. Source: Bybt.com

Filbfilb, an anonymous trader and technical analyst, pointed out that before the Bitcoin price fell, high financing interest rates on the Bitcoin futures market had already emerged. At the same time, the Bitcoin stock flowing to the trading platform has also increased. .

The Bitcoin futures market uses a mechanism to motivate traders to perform different operations based on market balance.

For example, if there are more buyers or long contract holders in the Bitcoin futures market, the short sellers will be incentivized to sell or sell Bitcoin. When this happens, the interest rate on financing rises, making it more expensive for traders to use bitcoin long-term.

Before the Bitcoin price fell below 60,000, the interest rate on BTC futures financing was in the range of 0.05% to 0.1%, which is 5-10 times higher than the 0.01% default financing rate.

The entry of a large number of bitcoins onto the trading platform can contribute to the decline in prices, as whales usually keep bitcoins on trading platforms when they intend to sell bitcoins.

Therefore, selling pressure from whales and high interest rates on futures financing may be the reasons for Bitcoin's crash last Sunday.

How the Stable Token will further promote the BTC price rebound

According to the latest data from CryptoQuant, even though Bitcoin's price fell temporarily, the number of stable tokens flowing to the trading platform has increased again.

In the crypto market, traders usually use stable tokens such as USDT and USDC to protect their bitcoin instead of cashing out their assets into bank accounts.

In general, the trading platform has a processing period of 3 to 7 days for users to deposit cash, so when a trader wants to re-enter the encrypted market, it will be very inconvenient to transfer cash from the bank account back to the trading platform.

BTC foreign exchange reserves (blue), stable capital inflows (green) and BTC prices (yellow). Source: CryptoQuant

Therefore, when stable tokens start flowing onto the trading platform again (as shown by the green spike in the image above), it means that over-the-counter capital may find time to return to the Bitcoin market.

The CEO of CryptoQuant, wrote:

"There are a lot of stable tokens flowing into the trading platform. Every 15 seconds, 100-287 stable tokens are stored in the ETH block. I think in the short term, we will see more stable tokens flowing in."

Although last week was also a period of upside in Bitcoin's price, it lacked an element of a stable token inflow.

When the Bitcoin price rebounds without a significant increase in a stable token inflow, it is difficult for the Bitcoin price to show a long-term upward trend, and the likelihood of a short-term price correction will increase.

If the trend of over-the-counter capital flowing back into the encrypted asset market continues, it is likely to push the Bitcoin price up, leading to a broader price rebound.

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