You have to admit that stablecoins are not the most exciting part of the crypto industry, especially when there are NFTs and TVLs to gawk at. However, stablecoins are important indicators for Bitcoin or alt-related activity, and no trader can afford to ignore them.
So what are stablecoins doing?
looking forward to red
Data from Santiment revealed that whales transacting stablecoins saw a slight increase even as the market entered red territory. Initially, these may not seem like related points, but stablecoin spikes can sometimes help push traders to buy.
On April 6, the most transactions that day [worth more than $100,000] were made with USD Currency [USDC], which recorded 7,453 transactions. Meanwhile, Tether [USDT] saw 6,450 such whale transactions. Considering that Tether’s market cap was around $30 billion higher than USDC’s at press time, this is worth looking into.
? #stablecoin Whale transactions have increased slightly as #crypto the markets have fallen. Just as we see spikes in whale transactions near the peak prices of unstablecoins, $USDT, $USDC, $BUSD, $ thousands of dollarsand $DAI they generally increase during the best buying opportunities. https://t.co/fjwGdjPbRX pic.twitter.com/nTugOgiTpq
— Santiment (@santimentfeed) April 7, 2022
Can you hear the song of the whales?
As expected, USDC posted a small spike in volumes, which started about three days ago and continued even shortly before press time. This is significant as the previous spikes occurred around the times when Bitcoin rallied.
Moving on to speed, we can see that activity involving USDC has been on the rise since mid-February, albeit with a fair amount of fluctuation. In particular, note the high spikes around March 4 and March 25. The question is, however, are users buying or selling?
The exchange offer may give us a better clue, and in this case, it appears to be a sell case. We can conclude this from an increase in USDC volume returning to exchanges. However, this trend has been dominant since early December 2021, when the lockdowns began. One interpretation is that investors were giving up their USDC and bringing home Bitcoin, Ether, or alternatives to “buy the dip.” And from the looks of it, this keeps happening.
a bloody drop
Bullish investors were understandably upset when Bitcoin dipped below $45,000, just as many assumed the king coin had finally broken above its previous resistance level.
However, Bitcoin may not be exactly the catch of the season, as data from the founders of Glassnode revealed that investors seemed to be showing more interest in Ethereum and other alternatives as well.
#bitcoin the volume traded decreased -26% in the first quarter of 2022 compared to the first quarter of 2021.
— ??????????? (@Negentropic_) April 4, 2022
With the DeFi potential in store for these assets, it seems stablecoin whales are far from becoming irrelevant any time soon.