Bitcoin’s price was still struggling to hold its own above $ 32,000. The world’s leading cryptocurrency saw erratic behavior over the past month as it staggered far from its recently set all-time high. At times like these, the dynamics between the stock market data of the top stablecoins and the short-term price movement of Bitcoin reveals crucial data points.
The Santiment cryptanalysis platform shared a pretty interesting take on the same. It turns out that since the beginning of the year, the amount of ERC-20 tether that is being moved into well-known exchange wallets has increased three times. The influx of the top stablecoin increased with every correction Bitcoin went through. This indicated potential dip buying efforts by market speculators.
More specifically, over $ 2 billion USDT went into exchange wallets during the big drop in prices between January 4th and 5th. An additional $ 3.6 billion inflow into the exchanges was recorded between Jan 11-13 when the price of Bitcoin fell from its ATH to $ 34.4,000.
More recently, between Jan. 21-22, more than USD 2.4 billion went into exchange wallets, according to Santiment’s latest chart.
That doesn’t stop there. The platform also revealed that there were multiple isolated spikes in Tether’s exchange inflow around local BTC floors, similar to those observed on January 15 and January 20, respectively.
And tether isn’t the only stablecoin. A similar pattern has also been observed in the foreign exchange inflows of other pegged tokens such as USDC, TrustTokens TUSD and DAI, which saw a number of upward moves around Bitcoin’s recent setbacks.
Where did this pressure come from?
Tether’s growth in 2019 and even in 2020 was far from overwhelming. This is largely thanks to Bitcoin, which experienced its price explosion especially in the first and second week of the new year, which in turn led to more and more stablecoins being minted.
But institutions have found their preferred alternative assets and are investing heavily in them. Yes, Tether is still the top dog.
In addition, Santiment also noted the pairing of the median transfer value of stablecoins over the past 30 days plotted against the price of the Bitcoin chart with market inflow data suggesting the [potential] The surge in buying pressure has actually been driven by large stablecoin holders rather than retail investors.
How important is bitcoin now?
With the above charts in mind, the recent surge in stablecoins inflow could potentially indicate Bitcoin-related buying pressure, which in turn could further increase the price movement of the crypto asset.
However, it is impossible to make a definitive conclusion as to whether the stablecoins that went public were used to buy BTC altcoins. However, the above charts painted a picture that institutions were optimistic and looking for potential buying opportunities.
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