- The price of Bitcoin has risen by 3.34% in the last 24 hours
- CPI sparked an influx of $500 million stablecoins on Binance
Bitcoin [BTC] has seen a surge on the charts lately, one that has pushed it past the $100,000 mark. At the time of writing, Bitcoin was trading as high as $102,048, after rising more than 7% during the week.
Needless to say, this price pump has gotten the crypto community talking about what’s behind it. One analyst believes that the latest CPI report may have been the driving force behind the crypto market’s recovery.
CPI Data Boost Pushes Bitcoin Past $100,000
According to CryptoQuant Analyst Fost credited the CPI boost with fueling stablecoin inflows worth $500 million on Binance. This flow of money has become good news for Bitcoin and has surpassed the psychological level of $100,000.
Source: CryptoQuant
Following the release of better-than-expected CPI inflation data, market sentiment has shifted significantly to positive. This sentiment was reflected in the stablecoin inflows on Binance.
This surge in inflows comes as investors interpreted the news as a positive signal that the prevailing market trend for BTC is likely to continue.
Source: CryptoQuant
Moreover, the capital inflow on Binance was mainly used to acquire Bitcoin, pushing the price back above the critical threshold of $100,000. This resulted in a sharp drop in Bitcoin’s reserve on Binance.
Since August 12, more than 63,000 Bitcoins have left Binance’s reserves. This is a sign that investors have a lot of confidence in Bitcoin’s current trend and are likely to position themselves for the long term.
Can she maintain these profits?
With inflation data reinforcing market optimism, Bitcoin could see more gains soon. Especially as the US market expects the inauguration of a pro-crypto president.
Due to the same, the prevailing market conditions can cause Bitcoin to make more gains on the price charts.
Source: Cryptoquant
For starters, Bitcoin’s Taker Buy Sell Ratio has soared over the past three days, reaching 1.116 at the time of writing.
When the buy-sell ratio is above 1, it means buyers dominate the market. By extension, this means that the recent price increases have been driven by high demand.
Source: Cryptoquant
Moreover, we can see that buyers are mainly taking long positions, as evidenced by a rising financing rate.
BTC’s funding rate spiked in the past 24 hours, reaching a monthly high of 0.0247. When funding rates rise, it means investors are bullish and expect the price to rise even further up the charts.
Source: Santiment
Finally, Bitcoin has become scarcer. This scarcity is reflected in a rising stock-to-flow ratio. When BTC becomes scarce, its value increases because its value is based on the laws of supply and demand. Greater scarcity implies more holders are storing their assets in personal wallets, reflecting an accumulation trend.
Simply put, the release of positive CPI inflation data has significantly affected Bitcoin’s price performance. As such, investors have become optimistic and are interpreting the recent data as a sign of better future market performance.
Therefore, with bullish sentiments prevailing in the market, we can see BTC regaining $105,000. However, a correction could lead to a drop to $98,900.