Bitcoin May Not See Lasting Bullish Momentum Until This Happens
20 Setembro 2023 - 1:00PM
NEWSBTC
Bitcoin might not be able to observe any extended runs of bullish
momentum until this on-chain indicator reverses its trend.
Stablecoin Whale Supply Has Dropped To Lowest In Six Months During
the past few days, Bitcoin has registered some rise and has managed
to breach the $27,000 level. The asset has, however, been unable to
build up any sustained moves above this mark so far. The below
chart shows how the cryptocurrency’s price has changed in recent
days: Looks like the asset has gone through some net growth in the
last few days | Source: BTCUSD on TradingView While moves above the
level have all failed, the asset is still more than 3% up during
the past week, which is more than some of the other top coins like
Ethereum (ETH), Cardano (ADA), and Dogecoin (DOGE). Now, as for
whether Bitcoin can find a proper break toward higher levels, data
from the on-chain analytics firm Santiment may provide some hints.
The indicator of interest here is the combined percentage of the
stablecoin circulating supply that’s being held by the whales. Here
is a chart that shows the trend in this indicator over the past
year: The value of the metric seems to have been sliding down
recently | Source: Santiment on X The “whales” here refer to
entities that are carrying at least $5 million in their addresses.
These investors are among the largest in the market, so they can
hold some notable influence. Related Reading: Here’s Where Next
Bitcoin Resistance Lies, From An On-Chain Perspective From the
graph, it’s visible that the total stablecoin supply held by these
humongous holders has been on a net decline during the past few
months. Following the latest drawdown in the metric, its value has
hit 51.14%, which is the lowest observed since March 18th, about
six months ago. What Does This Mean For The Bitcoin Price? Now, the
main question is: what’s the relevance of this metric to Bitcoin?
The answer to this question lies in the reason why these holders
generally choose to hold stablecoins. Investors may want to hold
their capital in the form of these fiat-tied tokens whenever they
intend to avoid the volatility associated with other assets in the
sector like BTC. Such holders are probable to return back into the
market as if they were looking to completely exit the sector, they
may have done so through outflows into fiat. Once these stablecoin
investors find that the prices are right to jump back into the
volatile side of the market, they swap their tokens for them. This
act of shifting naturally provides a buying pressure on the prices
of the coins that they are moving into. Because of this reason, the
stablecoin supply could serve as a measure of the potential dry
powder available for Bitcoin and other cryptocurrencies. As the
whales are clearly the most significant entities in the sector, the
stablecoin supply held by them is of particular importance.
Generally, uptrends in BTC follow periods where the whales
significantly shed their stable supplies, as it means that they are
buying into the asset with them. Examples of such a trend are
visible in the chart, as this pattern formed both prior to the
January rally and the rebound in June. These investors have been
decreasing their supply recently as well, but as BTC has gone down
in this period instead, it’s likely that this decline is coming
from withdrawals into fiat. Related Reading: Bitcoin Rally Driven
By Coinbase Users? Premium Would Say So A turnaround in this
indicator may be the one to watch for, as it can be a sign of fresh
capital injections into the sector. Perhaps only once the whales’
buying power would return to the same levels as it was earlier in
the year when Bitcoin breached $30,000, the asset would be able to
find a sustained upward move. Featured image from iStock.com,
charts from TradingView.com, Santiment.net
Cardano (COIN:ADAUSD)
Gráfico Histórico do Ativo
De Jan 2025 até Fev 2025
Cardano (COIN:ADAUSD)
Gráfico Histórico do Ativo
De Fev 2024 até Fev 2025