Buying Power is Ready to Flow into Bitcoin and Other Crypto Assets
Bitcoin is on the move this week. Today, BTC/USD is moving towards $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.
While the Elon Musk induced candle was short-lived, the market is currently seeing the flow of a lot of dry powder.
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 more buying power ready to flow into BTC and other assets,” noted Glassnode.
Already, these newly minted stablecoins are being deposited onto exchanges.
And the result can already be seen in the price of Bitcoin up 2.71%, Ether making another attempt at its ATH ETH 5.70% Ethereum / USD ETHUSD $ 1,837.64
$104.755.70% Volume 27.31 b Change $104.75 Open $1,837.64 Circulating 114.97 m Market Cap 211.28 b 9 h Chinese Publicly Listed Company Buys Bitcoin (BTC) and $17.9M Ether (ETH) 9 h 2-Day Old DeFi Protocol Amasses Over $6.4 Billion; Boasts of 3-Digit APY 10 h Ethereum Price Bounces as the Network Prepares to Attract a New & Wider User base , and many top coins like ADA, THETA, ATOM, and DeFi tokens enjoying an uptrend.
In the short term, I think $BTC would protect 33k level. Stablecoin deposit to exchanges is increasing.
— Ki Young Ju 주기영 (@ki_young_ju) January 31, 2021
Moreover, a big outflow was recorded from the largest US exchange Coinbase, which is speculated to be from Guggenheim’s proposed SEC filing to buy $500 million in Bitcoin via GBTC that has been officially effective from Jan. 31st, 2021.
Grayscale, the largest asset manager, actually uses Coinbase Custody for its clients’ digital assets.
The outflow from Coinbase was massive at 15,000 BTC at an entry price of $32,400, which Ki-Young Ju, CEO of data provider CryptoQuant, noted, went to custody wallets and is likely to be OTC deals from institutional investors giving “the strongest bullish signal.”
On-chain analyst Willy Woo is also turning bullish as he says, “the market has completed a full purge of overheatedness.”
The profit-taking is expected to be now 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 for that, we need to enter a bearish phase. However, Woo says that is ”very unlikely as we are bounded by the $29k price floor.”