Bitcoin dipped under $60,000 yesterday, one day after reaching an all-time record of $61,950. But the on-chain data shows the uptrend could continue in the short term.
One important metric showing an optimistic near-term is the increase in stablecoin inflows into the exchanges.
The entrance of more capital into the cryptocurrency market might further increase Bitcoin’s momentum.
When Bitcoin enters discovery and reaches a new record-high, the interest naturally increases.
There is a ton of liquidity in this fast-moving market, making this the perfect opportunity for whale investors to sell and take profit on their investments.
Filbfilb, a technical analyst that is pseudonymous, said that deposits into exchanges and high futures market funding rates were seen before the decrease.
High BTC inflows into exchanges possibly led to the decrease because large investors often deposit Bitcoin into exchanges when they plan on selling.
Therefore, the selling pressure from large investors and high futures funding rate was possibly the reason behind yesterday’s pullback.
How the BTC rally can continue
Despite the stop in the rally, exchange stablecoin inflow is increasing again, according to the latest data.
And given the way crypto exchanges handle stablecoin withdrawals and deposits to and from bank accounts, this shows that sidelined capital might be seeking to get back into Bitcoin.
And throughout last week, the one missing piece to the BTC rally was stablecoin inflows.
When Bitcoin increases without also seeing a rise in stablecoin inflows, it increases the possibility of an unfounded uptrend and a short-term downturn.
If capital continues to move back into the market, there is a high potential for further Bitcoin momentum and a broader rally.