$ 7.6 billion in stablecoins, is it a bullish or bearish sign for Bitcoin?














We just had another optimistic week for Bitcoin as the price surged above the critical resistance of $ 7,200 and headed for $ 7,300.


However, the price has corrected a bit and is currently only $ 7,171. So, did Bitcoin peak? Or is it gaining momentum before halving after only about 3 weeks?


Bitcoin gradually towards 10K dollars



Chart BTC/USD daily | Source: TradingView


Starting with the daily chart, we can see that BTC has successfully flipped the resistance of the long-lived descending channel to support. Channel formed in January this year, breakout is a bull trap and occurs twice to invalidate the channel.


Thus, in the chart above, there are 2 different scenarios: "price increase" and "extremely discount". The uptrend channel here is a rather conservative trajectory and is a new path that shows Bitcoin gradually approaching $ 10,000 by September 2020.


This sets the resistance for next week around $ 7,900 with support on the channel at around $ 6,400.


Returning to the previous descending channel during a pandemic-related sell-off can bring Bitcoin orbit to zero within the same time period. So the trend is slightly up now. But in the end, which scenario seems more likely? No one really expected Bitcoin to go to zero. After all, it's not a DeFi dapp! Is it too early to say anything?


The fact of the matter is that there are some interesting fractal going on, along with other extremely bullish signs at the moment.


The weekly MACD works as if the price was at the bottom


The weekly average divergence convergence (MACD) seems to be set to create bullish cross next week.


In other words, the pattern is exactly the same as mid July, where we had a fake bullish cross because then the price corrected to 50% and the next bullish cross helped increase 266%.



MACD chart of BTC/USD weekly | Source: TradingView


This exact model has been mentioned since December of last year, and if Bitcoin sustains gains for another week, the market will be extremely excited, especially when halving is only counted by days.


Of course there are other factors to consider such as a few trend lines and indicators. In recent weeks after the Corona epidemic broke out, the correlation between Bitcoin and traditional markets has become noticeable and if we fall into a more terrible global recession, it can really be Strong impact on Bitcoin price until there is a split.


Market correlation is strong


The recent correlation since the beginning of 2020 is not to be missed. However, that did not happen in the last two months of 2019, when Bitcoin fell during periods of strong economic growth.


bitcoin


Compare BTC/USD weekly with S&P 500 and Chart of future contracts mini | Source: TradingView


The Christmas selloff by retail investors may add to the selling pressure from the miners, but that's a hypothesis for another day.


Currently, Bitcoin price action is closely following the S&P 500. And as the famous YouTuber Sunny Decree has recently pointed out that the S&P mini futures contract is acting as a valid indicator for future price action.


In the chart above, the S&P mini futures contracts are blue and the S&P 500 is yellow. Mini futures are showing another spike move that neither Bitcoin nor S&P have yet to make. Therefore, the validity of this is an indicator that will prove itself throughout tomorrow.


However, with all reliable indicators, they are only reliable until they are ineffective and one such example fills the CME gap.


The CME gap is at 8,490 dollars


bitcoin


CME chart BTC/USD weekly | Source: TradingView


Throughout 2019 and early 2020, this is an extremely reliable indicator, but it hasn't really worked since Dark Thursday. However, that does not mean that it will not fill again, especially as prices begin to rise as they do now.


Combining the recent growth of Bitcoin over the past few weeks and the correlation that appears with the mini S&P futures contract, the rally next week could fill $ 8,490, which is an 18% growth compared to current price.


This is yet another bullish case for Bitcoin to continue its advance and is further strengthened by the increasing difficulty in mining, which is currently being set up to wipe out the reduction caused by the March 12 incident.


Mining difficulty increased again


bitcoin


Difficulty of exploitation BTC | Source: BTC.com


Over the next 24 hours, the mining difficulty is expected to increase by nearly 9%. In early 2020, this witnessed price increases with a larger percentage.


With this in mind, a 9% increase in difficulty could result in a price increase of more than 10%, leading the leading digital assets to regain an important 8K area and fill the CME.


However, all of these indicators only indicate the possibility of price increases and it would be naive to think that this is the only case of Bitcoin. So, what are the discount indicators?


An important number being built in the past few weeks is the absolute value of the major stablecoins.


7,6 billion dollars Awaiting


According to data on Coin360, currently there are nearly $ 7.6 billion held in stablecoins, including:


  • USDT = 6.37 billion dollars

  • USDC = 732 million

  • PAX = 265 million

  • BUSD = 35 million

  • TUSD = 221 million

In terms of price increases, this can be interpreted as the most bullish index of all time. And this number is enough to buy more than 1 million BTC.


In fact, both miners and major exchanges account for the majority of stablecoin holders.


However, in terms of discounts and assuming that it is not an exchange or miner that holds the majority of stablecoins, we must ask the question: So who are they? Why do they do that?




"Respect for a global pandemic. There will be fireworks, but only the most patient market participants will see them.


Just like the case of Bitcoin going to zero, this chart on the weekly view shows that Bitcoin is still in a valid discount channel and has yet to exit.


If Bitcoin is unable to establish a new ascending pattern, this chart indicates an accumulation of $ 2K by the end of this year. Perhaps this is a chart that stablecoin holders are not expecting and a drop below $ 6,400 next week will support this theory.


You can see the price of BTC here.


Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.


Minh Anh


According to Cointelegraph









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