Stampede of Bitcoin Buyers Pushed BTC Past $20K, Exchange Data Shows

Stampede of Bitcoin Buyers Pushed BTC Past $20K, Exchange Data Shows
A stampede of bitcoin buyers pushed the cryptocurrency over the $20K threshold.
(CrispyPork/Getty Images)

Twenty thousand isn’t just a nice round number. It’s a floodgate that’s now been opened.

Exchange data shows exactly how the dollar price of broke the key psychological $20,000 threshold in early trading hours Tuesday and kept on going. The pattern could be a sign of long pent-up demand for the cryptocurrency, and underscores that seemingly arbitrary levels do matter to the market.

According to data provided by on-chain crypto analytic firm CryptoQuant, there was an unusual spike in the number of stablecoin inflow addresses for all exchanges, an indicator of “extreme buying power,” between 13:30-13:40 UTC (8:30 a.m. to 8:40 a.m. ET).

“Many people were trying to deposit stablecoins to buy BTC,” Ki Young Jun, chief executive of CryptoQuant, told CoinDesk.

A chart provided by crypto data portal CryptoWatch shows that approximately $45 million was traded on Kraken’s BTC/USD spot market from 13:30-14:00 UTC as bitcoin’s price moved up by 5%.

It was not clear what drove the surge of bitcoin buying orders on exchanges at the time, but it occurred just as it invested about $744.26 million worth of bitcoin in November.

Also on Wednesday, the Chicago Mercantile Exchange (CME) it will launch a futures contract on in February 2021.

Some analysts are anticipating larger buyers in the coming months. 

“Looking forward to 2021, we should expect the outsized bids of institutions to have a much greater determining influence on the price of bitcoin and other cryptocurrencies,” Artur Sapek, founder of CryptoWatch, told CoinDesk.

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With an increasing number of institutions in North America and Europe buying bitcoin as an inflation hedge, there is a shrinking supply of the cryptocurrency in the marketplace, according to Simons Chen, executive director of investment and trading at Hong Kong-based crypto lender Babel Finance. Demand was thus able to break through a significant amount of resistance near the previous record high. 

“There had been some orders sold at around $20,000 from people who bought bitcoin at high prices back in 2017,” Chen said. “But those orders are mostly gone by now and $20,000 has become the new supporting level.”

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