$ 1 billion in stablecoins shows investors predicting lower prices

More than $ 1 billion is currently being invested for the two main types of stablecoins: USDT and USDC, as investors wait for a better time to invest in crypto assets.

Are investors moving away from Bitcoin and coming with stablecoins? At least in the short term, this is not a sign of price increases. As of March 3, there were only $ 400 million USDT and USDC on exchanges. In less than 4 weeks, the total balance increased by 150%. Researcher Ankit Chiplunkar of TokenAnalyst said:

“The balance of stablecoins USDT and USDC on exchanges has surpassed 1 billion dollars. That is a measure of the amount of money wait or were placed in limited orders at real. Surname Waiting for the perfect time to buy. ”


Total USDC and USDT on the exchange

However, in the long run, more than $ 1 billion in stablecoins could be a good sign for the final recovery of the cryptocurrency. After all, putting money in stablecoins is a more positive signal than completely withdrawing money from the market. The stablecoin data shows that investors are preparing to push money into the cryptocurrency market when it is stable and is probably waiting for Bitcoin price drops before execution.

Demand about Stablecoin, the volume gradually decreases point missing buyer

The price of Bitcoin has almost doubled since falling to $ 3,600 - one of the sharpest declines in 11-year history. That could indicate that the market is recovering. But it is too early to celebrate, because according to the data there may not be enough buyers to drive a sustained rally.

Specifically, based on the volume of futures and spot trading platform. Futures trading volume is the daily volume from futures trading platforms such as OKEx, Huobi, Binance Futures, BitMEX, FTX and Bybit. These exchanges allow users to trade with leverage or to borrow at increased risk. Volume of spot exchanges coming from exchanges primarily handling fiat-to-crypto and stablecoin-to-crypto pairs. Binance, Coinbase, Kraken, Bitstamp and Bitfinex account for 83% of the daily spot market volume, estimate about 1.3 billion dollars until yesterday.

The volume on both futures and spot contracts has been relatively stagnant since mid-February. Despite the increase in Bitcoin price, the data represents no real increase in buyers in the market to spur an extended price increase.

Stablecoins 2

Daily volume of the Bitcoin spot market

In technical analysis, an increase in an asset without a volume increase is considered to be a weak or fake move, often causing serious adjustments.

Uncertainty surrounding global stock markets and a lack of demand for high-risk assets can lead to a longer consolidation period for crypto assets.

Why do investors guess Will the cryptocurrency market decline in the short term?

Historically, when Bitcoin dropped, it tended to remain low for some time. For example, in December 2018, when Bitcoin price dropped to as low as $ 3,150 on major exchanges, it took more than 4 months to breakout the range of $ 3,000 - $ 4,000.

Prices have recently rebounded. But there is a possibility that the supply of exploitation is "delayed". This happens when miners sell more Bitcoin than they mine. When prices drop significantly below breakeven prices, miners are under economic pressure to sell tokens to cover costs. Recent price movements have severely affected miner profits before adjusting the difficulty and the halving of approaching Bitcoin will push the breakeven price higher. Therefore, it is likely that the "delayed supply" situation leads to a steady flow of token sales on the market, further pushing prices down.

Whether the delayed supply adds to selling pressure on cryptocurrencies remains unclear. The argument can be made that when the Bitcoin price remains stable between $ 6,000 and $ 7,000 despite the miner sell-off, it proves the strength and stability of the market.

Bitcoin soared sharply from $ 3,600 to $ 6,500 in a matter of days, causing some investors to worry. Historically, Bitcoin has been performing well for a long time when prices stabilized for 3 to 4 months, as it created a stronger bottom for assets to recover. If the buyer is still not involved and keeps the money in stablecoins, the Bitcoin price will easily fall back.

You can see the price of BTC here.

Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Minh Anh

According to Longhash

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