Bitcoin Faces $100,000 Resistance Amid Stablecoin Concerns

Bitcoin (BTC) has been trading with a bullish bias, facing resistance at $94,000 with prospects for further gains. However, a renowned analyst has cautioned against overly optimistic expectations for the Bitcoin rally, citing a crucial indicator.

For a sustained rally, consistent capital inflow is necessary to provide the liquidity required for further upside. The stablecoin minting indicator, which refers to the issuance or creation of new stablecoins such as Tether (USDT) or USD Coin (USDC), is a key factor in this regard. Stablecoin minting often signals capital entering the crypto market, which can increase liquidity and confidence as investors anticipate profitable opportunities. Both of these are signs of potential bullish pressure.

According to the analyst, the absence of strong stablecoin inflows raises questions about the sustainability of the current Bitcoin rally. The rally to the $100,000 psychological level remains under threat. It is worth noting that stablecoins are less significant as a leading indicator for Bitcoin’s price. Analysts cite other factors like institutional inflows via ETFs or Strategy (MSTR) purchases.

If profit-taking commences, a candlestick close below the midline of the bullish breaker at $86,562 could reverse the trend. This could plunge Bitcoin back into consolidation below the crucial level of $85,000.

Technical indicators align with the bullish outlook. The Relative Strength Index (RSI) is rising, recording higher highs, suggesting growing momentum. Its position below 70 indicates there was still more room upward before BTC was overbought and at risk of correction. Similarly, the Awesome Oscillator (AO) histograms flashed green, indicating bullish control. Their position above the midline (in positive territory) adds credence to the bullish thesis.

As of the latest data, Bitcoin was trading for $93,714, with up to 9% of a 20% potential rally still in the cards. The falling wedge pattern’s target objective is the 20% climb, determined by measuring the longest height of the wedge and superimposing it at the breakout point. This bullish reversal is already in action after Bitcoin price flipped the critical resistance at $85,000 into support and converted the support zone into a bullish breaker.

Based on the daily chart for the BTC/USDT trading pair, a daily candlestick close above $91,575 could set the tone for Bitcoin’s price to move further upside. Increased buying pressure beyond the immediate resistance at $94,000 could see Bitcoin price eye $100,000 next. BTC could extend to the $102,239 target objective in a highly bullish case.

Markus Thielen, the head of research at 10x Research, has urged caution, citing the lagging stablecoin minting indicator. “Given that our stablecoin minting indicator has yet to return to high-activity levels, we remain cautious about the sustainability of the current Bitcoin rally,” Thielen wrote in the latest 10X research.