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

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 bitcoin broke the key psychological $20, 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 UTC ( a.m. to 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 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 CoinDesk published a story that U.K.-based Ruffer Investments confirmed it invested about $ million worth of bitcoin in November.

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

Some analysts are anticipating larger buyers in the coming months. 

“Looking forward to , 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, from people who bought bitcoin at high prices back in ,” Chen said. “But those orders are mostly gone by now and $20, has become the new supporting level.”