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Bitcoin has entered a period of calm after a turbulent decline from $99,000 to $90,000 in just three days. The leading cryptocurrency is currently trading at over $95,000, holding a pivotal level that will likely determine its next move. This key area will determine whether Bitcoin regains its upward momentum or seeks low-level liquidity to create stronger support.
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Despite the recent volatility, market participants remain optimistic, as on-chain data provides new insights. According to CryptoQuant, the notable rise in stablecoin transfer volumes has coincided with Bitcoin’s price movement. This metric often indicates increasing purchasing power entering the market, and is a potential indicator of renewed buying interest in Bitcoin.
With Bitcoin consolidating above $95,000, traders and investors are closely monitoring its ability to reclaim the psychological resistance at $100,000. Conversely, a loss of support could push Bitcoin to retest lower levels near $90,000 or even deeper liquidity areas.
Bitcoin and stablecoins: what do they have in common?
Bitcoin has achieved a remarkable milestone, remaining less than 1% away from the $100,000 level, driven by a wave of institutional and retail buying. This historic rise reflects growing global demand, as investors from various countries use stablecoins to purchase Bitcoin. Stablecoins have emerged as the bridge of choice, enabling seamless transactions across borders and currencies.
According to CryptoQuant analyst, Axel AdlerThe recent surge in stablecoin transfer volumes has coincided with a rise in Bitcoin prices. This trend highlights the important role that stablecoins play in providing liquidity and increasing market momentum. Cash flows through stablecoins create strong support for Bitcoin’s price, allowing it to maintain upward pressure even as it approaches critical psychological levels.
The relationship between stablecoin activity and Bitcoin price movement provides valuable insights into market dynamics. An increase in stablecoin transfers often indicates increased demand for Bitcoin, providing a reliable indicator of potential price movements. This interaction is particularly important in identifying periods of high buying pressure, as stablecoins facilitate rapid and efficient market participation.
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As Bitcoin approaches the $100,000 mark, the steady flow of stablecoin-based liquidity underscores the global appeal and resilience of the asset. Whether this momentum leads to a break above $100,000 or a period of consolidation, the role of stablecoins in fueling demand will remain pivotal in shaping Bitcoin’s price path.
BTC price is approaching the critical zone
Bitcoin is currently holding above the crucial level of $95,000, a price that will play a decisive role in its short-term trajectory. This level acts as a psychological and technical support area that could push BTC towards the long-awaited key level of $100,000 this week or delay the breakout until next year.
For Bitcoin to surpass $100,000, the $95,000 level would need to hold for several days, allowing enough time to fuel demand and attract new liquidity. Sustained buying pressure around this range will likely enable BTC to break through the key psychological barrier, and continue its historic rally.
However, bullish momentum faces risks. Failure to hold the $95,000 level will expose Bitcoin to a retest at $92,000, another important support. Losing both levels could trigger a major correction, sending Bitcoin into lower demand areas around $85,000 or below $80,000. Such a move would sharply reverse its recent rise, shaking market confidence.
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The coming days will be pivotal as traders keep an eye on continued support above $95,000. Bitcoin’s rise to $100,000 could happen soon if the bulls defend this level effectively. Otherwise, the market may be preparing for a deeper correction before regaining its upward momentum.
Featured image by Dall-E, chart from TradingView