You have to admit that stablecoins are not the most exciting part of the crypto industry, especially when there are NFTs and TVLs to stare at. However, stable coins are important indicators of Bitcoin or alt-related activity, and no trader can afford to ignore them.
So what do the stablecoins do?
Santiment data showed that whales making stablecoin trades saw a slight spike even as the market entered red territory. These may not seem related points at first, but stablecoin spikes can sometimes help traders to buy.
On April 6, most transactions that day [worth more than $100,000] are made with USD Coin [USDC], with 7,453 transactions. Meanwhile, Tether [USDT] saw 6,450 such whale transactions. Considering that Tether’s market cap was about $30 billion more than USDC at the time of writing, this is indeed worth investigating.
#Stablecoin whale transactions have increased slightly as #crypto markets have fallen. Just as we see spikes in whale trades near price peaks for unstable coins, $USDT† $USDC† $BUSD† $TUSDand $DAI generally peak during the best buying opportunities. https://t.co/fjwGdjPbRX pic.twitter.com/nTugOgiTpq
— Santiment (@santimentfeed) Apr 7, 2022
Can you hear the whales singing?
As expected, USDC registered a small increase in volumes, starting about three days ago and continuing even shortly before the paper went to press. This is important because previous spikes occurred near the time Bitcoin rally.
Moving to speed, we can see that activity with USDC has indeed risen since mid-February, albeit with a fair amount of fluctuation. Pay special attention to the high peaks around March 4 and March 25. However, the question is: do users buy or sell?
Exchange offer can give us a better hint and in this case it looks like a case of selling. We can infer this from an increase in the volume of USDC returning to the exchanges. However, this trend has been dominant since early December 2021, when the crashes started. One interpretation is that investors gave up their USDC and took home Bitcoin, Ether or alts to “buy the dip”. And it looks like this is still going on.
A bloody drop
More bullish investors were understandably upset when Bitcoin fell below $45,000 – just as many assumed the king’s coin was finally past its former resistance level.
Bitcoin may not exactly be the catch of the season, though, as data from Glassnode founders showed that investors also seemed to show more interest in Ethereum and other alts.
#Bitcoin traded volume down -26% in Q1 2022 as per Q1 2021.
— (@Negentropic_) Apr 4, 2022
With the DeFi potential in store for these assets, it looks like stablecoin whales are far from becoming irrelevant anytime soon.
This post Decoding What ‘Increasing Stablecoin Whale Transactions’ Means For BTC And Alts
was published first on https://ambcrypto.com/decoding-what-mild-increase-in-stablecoins-whale-transactions-means-for-btc-alts/