At the moment, Bitcoin is trading near $12,000, which is the level the coin has broken twice in the past two weeks, so the latest breakout is the third time.

As soon as Bitcoin breaks the $12,000 price, sell traps occur due to several sell orders being placed at or near a certain price, and when the trading price reaches this point, a large number of sell orders are triggered, usually at low prices, to secure fast trades, which It causes the price to drop again.

The reason for this is the nature of supply and demand in the Bitcoin system, which the “Bitcoin” report delves into.decomposition” the last one.

Despite the price increase, there is strong demand for bitcoin at the moment, something that has happened only three times in bitcoin history, including during the 2017-2018 rally, in June 2019 and currently.

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The first indications trying to capture the source of this demand point to cryptocurrency exchanges where the stablecoin Tether provides the liquidity needed for Bitcoin demand.

On August 10, Tether USDT worth $806 million was deposited on several exchanges, which represented 9% of the total supply.

The report indicated that these pumps include the following:

No wonder more USDT in the markets means more trading.

Considering that in the average of the past seven days, the Tether received by the major exchanges is trading about 19 times, with Tether supporting tens of billions of dollars of liquidity per day.

Philip Gradwell, chief economist at Chainalysis, said:

Bitcoin leaves crypto-to-coin exchanges and turns to crypto-to-cash exchanges.

In 2019, this outflow amounted to $1.66 billion.

Gradwell cited two main reasons for this outflow from crypto to fiat:

First, due to the inflated rate, traders intend to exchange money into fiat currencies.

Second, buyers want access to bitcoin, via cash and coins, which confirms more demand for bitcoin.

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Another important point to note is that of the $1.66 billion mentioned above, $1.12 billion has been the net inflow since mid-March when the price dropped below $4,000 and started rising again.

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Quoting from the report:

With the price rising above $10,000, inflows from cryptocurrencies to fiat have accelerated, with 154,000 BTC moving since July 27.

If the demand is absent from the market, the selling pressure that builds will lead to a decrease in the price of Bitcoin, and thus the equation of supply and demand for Bitcoin will be pivotal and the Tether currency will have a clear impact on it.

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