As Bitcoin soars toward a new all-time high and has recaptured the interest of the world of finance, a sizable supply of liquidity is building on exchanges, not in BTC, but in stablecoins. The rising supply alongside surging crypto valuations suggests that the recent rally is “liquidity-driven,” according to one cryptocurrency quantitative analyst.
That liquidity as it continues to stack up on exchanges everywhere could soon bring the most “unprecedented buying pressure in history” to the crypto market. Could the likes of Tether and USD Coin be the key to unlocking the prices in Bitcoin that experts someday predict?
“Liquidity-Driven Market Rally” Takes Bitcoin To Nearly $20,000
Bitcoin price is nearing $20,000, and at this point, the asset has gone parabolic, and most technical analysis has gone out the window. Trendlines no longer hold the unstoppable cryptocurrency back, and indicators have been overheated for weeks on end with not so much as a stumble, let alone a significant pullback.
Beyond technical analysis, fundamental analysis – consisting of quantitive and qualitative analysis – can also be used to determining the health or strength of an asset and its expected performance. Data showing that BTC was moving off of exchanges was perhaps the most useful information leading up to the recent rally.
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With no BTC on exchanges to buy and a diminishing supply, a sell-side liquidity crisis played out, sending the cryptocurrency from $10,000 to $20,000 in a few months flat.
With Bitcoin still trending hard and technicals remaining unreliable, quantitative data is king. And according to a leading crypto quant analyst, there is plenty of reason for more upside. In fact, billions and billions of reasons are pilling up on exchanges right now.
#Stablecoin supply on exchanges is crazy.
Sooner or later, you’ll experience unprecedented buying pressure in history.
— Ki Young Ju 주기영 (@ki_young_ju) November 25, 2020
Crypto Quant CEO: Stablecoin Supply To Drive “Unprecedented Buying Pressure”
According to Ki Young Ju, CEO of Crypto Quant, the stablecoin supply is growing rapidly on cryptocurrency exchanges. This liquidity, he claims, will soon drive “unprecedented buying pressure” in crypto markets. The capital pouring in tells the CEO that the current rally is liquidity-driven, and is set to continue henceforth.
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The data is yet another factor backing up the theory that Bitcoin has begun a new bull trend, and could reach some of the astronomical prices that experts predict.
Bitcoin rallies with each injection of more Tether into the market | Source: BTCUSD on TradingView.com
In the past, sharp-eyed crypto analysts notice a correlation between new Tether minted and Bitcoin rallies. That relationship is all due to the liquidity that the stablecoin supplies, which eventually flows into the Bitcoin and crypto market cap.
But liquidity pouring in like never before, things will only get more bullish for Bitcoin and crypto from here on out.
Featured image from Deposit Photos, Charts from TradingView.com and Crypto Quant