Bitcoin has risen above the $10,000 mark in a bullish price movement and it sets a new monthly high at $10,315. Traders and investors see this bullish rally as a good sign for Bitcoin and the cryptoasset market.
“But why has it broken through the crucial $10k resistance level? Well, one possible reason is the rising stablecoin market cap. For example, Tether (USDT) crossed the $10billion mark this month and USD Coin (USDC), Circle’s stablecoin, is also at its highest level, having reached a market cap of over $1billion. Perhaps some of this liquidity has made its way into bitcoin,” commented eToro Analyst Simon Peters.
In fact, analysts expect traders to target $10,500, and above this level price estimates ranging from $11,000, $14,000 and even $16,000 have been thrown about. And while this is exciting for bulls, it’s important to note that Bitcoin price has rallied 12.76% since rising from $9,142 on July 21 and the price has yet to retest underlying support around $9,450.
“I would imagine the ‘Depth of Market’ on exchange order books has been pretty low, given that over the last 5 months, more bitcoin has been taken off exchanges than put on. A big enough market order could have shifted the price significantly over the weekend. However, we are seeing some of this bitcoin coming back onto trading venues, with its net flow on exchanges positive for the first time since February. In my view, this is merely investors looking to take advantage of alt coin prices, which are now gaining momentum compared with Bitcoin,” added Simon Peters.
And concluded with: “Lastly, Bitcoin’s network metrics are also looking pretty healthy. Glassnode’s Reserve Risk metric, which is used to assess the confidence of long-term holders relative to the current price of bitcoin, is currently signalling an attractive risk-to-reward level, indicating that confidence is high and price is low. This could be the catalyst for bulls who were ‘sitting on their hands’ to now go out and buy.”