$7.6B Sitting in Stablecoins — Is This Bullish or Bearish for Bitcoin?

It's been another bullish week for Bitcoin (BTC) as the price surged by the disquisitional $7,200 resistance, as mentioned in terminal week's analysis, all the way to $7,300.

However, the toll has corrected slightly and is now sitting just beneath $vii,200. Then was this the local tiptop? Or has the leading digital asset got some steam left in it alee of the halving event that is now about 3 weeks away?

Daily crypto market performance. Source: Coin360.com

Bitcoin'southward dull grind to $10K

BTC USD daily chart. Source: TradingView

Starting out with the daily chart for Bitcoin, we tin see that BTC has successfully flipped the resistance of the long-standing descending channel into support. The argument for this channel's validity is that in January of this year, the breakout was a bull trap and that for this to occur twice would invalidate this channel.

As such, in the nautical chart in a higher place I plotted two different scenarios: "Bullish" and "Permabear." The bullish channel here is quite a bourgeois trajectory — one that in all honesty suits my personal conventionalities for Bitcoin — and a new path that shows a boring grind to $10,000 by September 2022.

This sets the resistance for the week ahead at effectually $7,900 with back up on the channel at effectually $vi,400.

A render to the previous descending channel, in some other alleged pandemic related sell-off, could put Bitcoin on a trajectory to zilch within the aforementioned timescale. Then for obvious reasons, I have a somewhat bullish bias right now. But ultimately, which scenario looks more likely to you here? No 1 really expects for Bitcoin to go zero. After all, information technology'south not a DeFi dapp! (Too soon?)

The fact of the matter is that there are some interesting fractals playing out, along with other incredibly bullish signs right now.

The weekly MACD is playing out equally it did at the lesser

The weekly moving average deviation convergence (MACD) indicator looks set to cross bullish in a calendar week from tomorrow.

In other words, we are currently seeing exactly the same pattern play out that we saw between July 2022 where we had a false bullish cross followed by a 50% correction that saw the side by side bullish cross lead to a 266% increment in value for Bitcoin.

BTC USD weekly MACD chart Source: TradingView

I have been mentioning this exact pattern since December final year, and should Bitcoin maintain its up momentum for some other week, ane can't assistance but get excited nigh the possible upside ahead of us, particularly with the halving beingness less than 23 days abroad.

There are of course other factors to consider, and I wouldn't desire to be branded a "balderdash-tard" based on a couple of tendency lines and an indicator. Over recent weeks in the wake of the coronavirus pandemic, the correlation between Bitcoin and the traditional markets has get noticeable, and should nosotros sideslip into a deeper global depression, it could realistically have a dramatic effect on the toll of Bitcoin until there is a decoupling.

Market correlation is strong

The recent correlation since the commencement of 2022 is something that can't be ignored. Nevertheless, neither is the final ii months of 2022 where Bitcoin slumped during a menstruum of strong economic growth.

BTCUSD weekly Comparing with S&P 500 and Mini Futures chart Source: TradingView

I suppose ane could argue that a Christmas sell-off by retail could have added to the extra selling pressure from miners, only that's a theory for another twenty-four hour period.

Today I desire to focus on the now, and the fact that currently, the Bitcoin price action is closely following that of the S&P 500. And as popular YouTuber Sunny Decree has pointed out lately, the S&P Mini futures are serving as a valid indicator for future cost activeness.

In the chart in a higher place, y'all can see the S&P mini futures in bluish and the Southward&P 500 in yellow. The mini futures are showing another spike that both Bitcoin and the S&P are however to reverberate, Thus, the validity of this every bit an indicator volition prove itself throughout the solar day tomorrow.

However, with all reliable indicators, they are just reliable until they aren't, and i such example of this is the CME gap filling.

The CME gap at $viii,490

BTCUSD weekly CME chart Source: TradingView

Throughout 2022 and early on 2022 this was an incredibly reliable indicator, just it hasn't actually been a affair since "Black Thursday." That isn't to say that it won't fill again though, especially now that the price is starting to pick upwards.

Combining the contempo growth of Bitcoin over the last few weeks and the correlation actualization with the S&P mini futures, a spike next week could run into the gap at $8,490 close, which would represent xviii% growth from the current toll.

This over again is some other bullish case for Bitcoin to go on on its upwardly path, and this is further echoed by the increment in mining difficulty, which is at present set up to wipe out the drop incurred equally a result of the March 12 price plunge.

Mining difficulty back on the rise

BTC mining difficulty. Source: BTC.com

In a piffling over 24 hours, the mining difficulty is expected to increase by nearly 9%. Before in 2022, this saw the price follow by a greater pct.

With this in mind, an increase of 9% in difficulty could lead to an increase of cost greater than x%, which could see the leading digital asset repossess that important $8K zone, which in plow, makes the CME gap-filling look increasingly likely.

Notwithstanding, all of these indicators just point up, and information technology would be naive to assume that this is the case for Bitcoin. And then what bearish indicators are there?

One metric that's been building up over the last few weeks is the sheer amount of value across major stablecoins.

$7.6 billion sitting on the sidelines

According to data on Coin360, there is currently near $7.6 billion parked in stablecoins. This is made upwards as follows:

• USDT = $6.37BN
• USDC = $732M
• PAX = $265M
• BUSD = $35M
• TUSD = $221M

Wearing a bull chapeau, this could be interpreted as the most bullish indicator of all time. This is plenty to buy over i million BTC.

If you combine this with the narrative that miners led the 50% dump on March 12 with around 300K BTC equally covered in my assay on March 22, you can then put together a picture that potentially a third, if not more of the stablecoins being held, could exist in the easily of larger miners waiting to the drive the price.

In fact, it'southward my personal belief that both large miners and large exchanges make up the vast bulk of those that hold stablecoins.

However, when wearing a bear hat, and assuming that it is not exchanges and miners property the lion share of stablecoins, you have to inquire the questions: what practice these holders know that I don't? And is some other leg down something that those property stablecoins are anticipating, and if so, why?

In one case such chart that caught my center was that of twitter user EscobarTrader:

Source: Twitter @EscobarTrader

Much like my case for Bitcoin going to nothing, this chart on the 2 weekly view shows that we remain in a valid downwardly channel that nosotros are nonetheless to break out of.

Should Bitcoin neglect to establish a new ascending blueprint, this particular nautical chart points to sub $2K accumulation levels by the end of this year. Perhaps this is the chart those holding on to stablecoins are property out for, and falling below $6,400 over the coming week would give weight to this theory.

The views and opinions expressed hither are solely those of @officiallykeith and practise not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should acquit your own inquiry when making a decision.

Source: https://cointelegraph.com/news/76b-sitting-in-stablecoins-is-this-bullish-or-bearish-for-bitcoin

Posted by: walkeriiii1981.blogspot.com

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