Stablecoin inflows to exchanges could push Bitcoin price to ATH

Stablecoin inflows to exchanges could push Bitcoin price to ATH

Bitcoin has resumed its bullish trend, rising steadily towards its all-time high of $108,200, following favorable U.S. inflation data and ahead of Donald Trump’s inauguration. The leading cryptocurrency reached a high of $105,847, its highest price since December 18, a significant increase from its recent low of $82,055 earlier this week.

Crypto investors are optimistic about the upcoming Trump administration, which has promised to prioritize cryptocurrency and potentially bring about significant regulatory changes. Trump has consistently advocated for pro-crypto policies, pledging to make the U.S. the "crypto capital" of the world. This has spurred hopes for increased institutional investments, particularly after his commitment to creating a crypto-friendly environment.

Despite the U.S. already being the world leader in cryptocurrency mining, critics often point to Bitcoin's energy-intensive proof-of-work mining process, which conflicts with global energy conservation initiatives. Trump, who recently launched his own meme coin, also oversees World Liberty Financial, a crypto project that has attracted millions of dollars in investments, including from prominent figures like Justin Sun.

The incoming administration’s focus on cryptocurrencies could lead to substantial capital inflows into the market. Over the last two days alone, Bitcoin exchange-traded funds (ETFs) have seen significant inflows, adding $755 million and $626 million, respectively, pushing the total cumulative flows to $38 billion.

In addition, there is growing optimism surrounding Bitcoin's price potential due to an influx of stablecoins. Data from CryptoQuant shows that stablecoins have continued to flow into exchanges, which are often used to purchase Bitcoin and other cryptocurrencies. This further supports the upward momentum of Bitcoin's price.

From a technical analysis perspective, Bitcoin shows strong bullish signals. The weekly chart reveals a bullish engulfing pattern, a positive technical indicator, where a large bullish candlestick has fully engulfed the previous bearish candle. Bitcoin has also formed a bullish pennant pattern, characterized by a long vertical line followed by a symmetrical triangle, a typical sign of a potential breakout. This pattern has historically been followed by strong price movements, as seen with Ripple (XRP) earlier this week.

Bitcoin continues to hold above the 50-week and 100-week moving averages and has surpassed the upper resistance level of $68,930, which was part of the cup-and-handle pattern that formed from 2021 to November last year. Based on these indicators, Bitcoin is likely to experience a strong breakout, potentially reaching its all-time high of $108,200. If Bitcoin surpasses this level, it could head toward the next psychological resistance at $100,000.

As Bitcoin continues to gain traction, both fundamental factors like Trump's crypto agenda and technical indicators point to a promising future for the cryptocurrency.