Bitcoin (BTC) is currently hovering around $67,000, poised to exit the consolidation range it has been stuck in for the past month. Despite initial worries of significant sell-offs following the halving event, those concerns have since diminished, paving the way for a potential upward movement.
Rising Demand and Inflows of Bitcoin ETFs
Based on a report by AMBCrypto, there has been a significant increase in Bitcoin ETF inflows in the past week, signaling a notable rise in demand. This surge has helped ease the selling pressure that was evident in previous weeks.
The key question now is whether the bullish trend can be sustained to achieve a breakthrough. A recent analysis by a cryptocurrency expert revealed that the stablecoin supply ratio (SSR) oscillator is showing positive developments. This technical tool assesses the sentiment in the stablecoin market in comparison to Bitcoin over a period of time.
SSR is calculated by comparing the current ratio to the 200-period SMA and then dividing the outcome by the standard deviation over the same timeframe to create Bollinger Bands (BB).
The stablecoin supply levels displayed above indicate market sentiment for traders. If the SSR falls below the lower Bollinger Band, it indicates decreased stablecoin dominance and a potential positive outlook on Bitcoin.
Technical Analysis and Market Sentiment
The analyst report’s visual representation illustrates the market’s tendency to retract when the SSR oscillator becomes excessively hot. A breach of the lower bands typically signals a potential long-term buying opportunity.
Despite its advantages, the SSR oscillator is not flawless, and each signal does not guarantee that prices will move as anticipated. At present, the stablecoin supply ratio is below the 200-period SMA but above the lower Bollinger Band. This metric fell below the lower threshold in early May when Bitcoin’s price dropped to US$56,000, but quickly rebounded.
The oscillator remains within the lower BB, suggesting a potential further increase in price. Notably, the SSR has been on the rise since October 2023, with periods of stagnation or decline in early January and mid-May.
Historical trends and future forecasts.
Following the January decline, Bitcoin prices surged, easily surpassing the US$46,000 mark. This historical trend raises expectations for a similar upsurge, with Bitcoin potentially breaking through the US$73,000 barrier in the next 2-4 weeks, indicating a significant breakthrough.
The upward trajectory of Bitcoin, coupled with reduced concerns about excessive selling and favorable SSR oscillator readings, paints a positive outlook for BTC.