Twenty thousand is not just a nice round number. It is a sluice gate that is now open.
Exchange data shows exactly how the dollar price of bitcoin broke the key $ 20,000 psychological threshold on Tuesday in the early hours of trading and continued. The pattern could be a sign of long pent-up demand for the cryptocurrency, underlining that seemingly random levels matter to the market.
According to data provided by crypto analytics firm CryptoQuant in the chain, there was an unusual spike in the number of addresses for stablecoin inflow across all exchanges, an indicator of ‘extreme purchasing power’ between 13: 30-13: 40 UTC (8 : 30 p.m. to 8:40 a.m. ET).
“A lot of people tried to deposit stablecoins to buy BTC,” Ki Young Jun, CEO of CryptoQuant, told CoinDesk.
A chart from crypto data portal CryptoWatch shows that about $ 45 million was traded on Kraken’s BTC / USD spot market from 13: 30-14: 00 UTC when bitcoin’s price rose 5%.
Also on Wednesday, the Chicago Mercantile Exchange (CME) announced it will launch a futures contract on ether in February 2021.
Some analysts anticipate bigger buyers in the coming months.
“Looking ahead to 2021, we can expect excessive bids from institutions to have a much greater determinant impact on the price of bitcoin and other cryptocurrencies,” Artur Sapek, founder of CryptoWatch, told CoinDesk.
With an increasing number of institutions in North America and Europe buying bitcoin as an inflation hedge, there is a shrinking supply of the cryptocurrency in the market, said Simons Chen, executive director of investment and trading at Hong Kong-based cryptocurrency lender Babel Finance. . Thus, demand was able to break through a significant amount of resistance near the previous record.
“There were orders of about $ 20,000 sold in 2017 from people buying bitcoin at high prices,” Chen said. “But those orders are mostly gone, and $ 20,000 has become the new level of support.”