Bitcoin's price is currently showing a positive trend and is facing resistance at $94,000, indicating potential for further increases. However, a well-known analyst is advising caution in expecting a strong Bitcoin rally due to a key indicator.
To maintain a sustained upward trend, there needs to be consistent capital inflow into the market to provide the necessary liquidity for further gains.
The lagging stablecoin indicator poses a threat to Bitcoin reaching the $100,000 mark. The bullish outlook for Bitcoin was evident early in the Asian market session, supported by technical patterns like the falling wedge, suggesting a potential 20% increase in price.
At the time of writing, Bitcoin was trading at $93,714, with a potential to rally up to 9% further. Breaking through the $85,000 resistance and turning it into support has set the stage for a bullish reversal.
The daily chart indicates that a daily close above $91,575 could pave the way for Bitcoin's price to rise further. Breaking through the $94,000 resistance level could see Bitcoin aiming for $100,000 and potentially even hitting $102,239.
Technical indicators like the RSI and Awesome Oscillator support this bullish outlook. However, caution is advised by Markus Thielen from 10x Research, who highlights the importance of the stablecoin minting indicator in predicting the sustainability of the current Bitcoin rally.
The stablecoin minting indicator measures the creation of new stablecoins, which signifies capital inflow into the crypto market, influencing Bitcoin's price. This indicator's lack of strong activity could jeopardize Bitcoin's rally to $100,000.
While stablecoins are not the sole indicator of Bitcoin's price direction, their absence of significant inflows raises concerns about the continuation of the rally. Attention is also drawn to other factors like institutional investments through ETFs and company purchases like MicroStrategy (MSTR).
If profit-taking occurs, a close below the bullish breaker level at $86,562 could reverse the trend, leading to consolidation below $85,000 for Bitcoin.